The technology >> the economics >> the challenge

The economics

At every second of every day, the National Grid must ensure that electricity supply precisely matches the continually changing demand.

Although most of the large changes in demand are predictable (such as the peak which occurs around 6pm each day, when people all over the country get home from work, switch on lights, and turn on many electrical appliances) there are continuous smaller fluctuations which are essentially random. And there is also always the possibility that a sudden large fluctuation could occur at any time if a power line or generating station fails.

For these reasons, the National Grid pays for reserve which involves certain power plants running at reduced output so they are able to inject extra power into the grid as it is needed. The National Grid also has to pay for some of these generators to go into a special "response" mode whereby they continually change their power output to respond to random changes in demand.

These so called "ancillary services" are expensive. Response alone costs in excess of £80m per year and is likely to increase in price. Also, the need for these services will increase because of the added unpredictability of renewable energy sources*.

The good news is that Dynamic Demand Control could provide many if not all of these services for a fraction of the cost. (Instead of the supply responding dynamically to unpredicted changes, certain sections of the demand react instead.)

This means, in principle, for example, if a refrigerator manufacturer incorporated cheap controllers into their units, they could be earning millions each year from the National Grid; with only a tiny increase in the unit cost. Not only that - at the same time they could help the shift towards greater use of renewable energy and help reduce carbon dioxide emissions from the operation of the power system.

So why hasn't it happened already?

* Most experts say that unpredictability will not pose a problem until renewables account for more than 20% of generation capacity. However, it is important to start planning now for greater proportions than this.