Statement: The real role for demand response in Ireland

A statement by Tony Whittle, managing director UK and Ireland at Enel X

In recent articles and editorials, The Irish Times has rightly drawn attention to the critical issues affecting the electricity power system in Ireland.

This report by Arthur Beesley highlights the security-of-supply tensions between industry and regulators in anticipation of increased winter demand for electricity. The fact is, Ireland is suffering from extremely tight capacity margins now, during the summer off-peak season.

Working with specialists such as Enel X, many commercial and industrial energy users have committed to reduce their demand when system capacity is stretched, and they do this reliably. The willingness of businesses to participate in demand response programmes has helped the island to avoid power outages.

Historically, Enel X customers might participate in four or five demand response events (dispatches) over the course of a year. There have been 17 dispatches so far in 2022 and five dispatches during one six-day period in July alone.

Siobhán McHugh, chief executive of the DRAI (Demand Response Association of Ireland), said: “The type of demand response that is incentivised under current rules is designed for ‘seldom and severe’ events on the power system. Current levels of dispatch indicate there is a dire capacity margin issue. We need to provide the right incentives for businesses who have loads that can be flexed more frequently.”

By addressing flaws in the market design, which cause mismatches between what customers can reasonably do and what the market expects of them, we can grow participation in grid flexibility services. Having more demand side flexibility will provide secure services to the grid in future years.

Grid flexibility services, including demand response, have a vital role in enabling a low-carbon future power system by accommodating higher levels of variable renewable generation. However, it cannot make up for a fundamental shortfall in generation capacity.

Businesses, including data centres, increasingly recognise the value that their large electrical assets can bring to the electricity system when they act as good ‘grid citizens’ by participating in demand response programmes. Now, the very same businesses that are working to avoid blackouts are threatened with mandatory curtailment this winter.

Demand response is well established in Ireland and proven in global electricity markets as a reliable mechanism that can prevent blackouts in emergency situations. However, if these exceptional events become weekly occurrences, we can expect higher costs, worsening emissions and further risks to security of supply.

Demand response has an associated cost that is inevitably higher than the cost of generation. For businesses to turn-off or turn-down their demand, many of them need to adjust equipment load, run their emergency backup generators, or use on-site energy storage. And while participating businesses can accommodate demand response events in response to power system stress, few of them are set up to participate at current unprecedented levels.

As an island with a strong and growing industrial base, Ireland is facing some unique challenges as it decarbonises its energy grid. Businesses can help to address these challenges, as this recent Microsoft project demonstrates. By partnering with industry to provide sophisticated ancillary services that help to stabilise the grid, Ireland can provide a vision of the future for other countries to follow.

Ends

Editors notes

Enel X is the Enel Group’s global business line that offers services that accelerate innovation and drive the energy transition. A world leader in advanced energy solutions, Enel X manages services such as demand response for approximately 7.7 GW of total capacity globally and 195 MW of installed storage capacity worldwide.

Through its advanced solutions, including energy management and financial services, Enel X provides each partner with an intuitive and bespoke ecosystem of technology platforms and consulting services, focused on the principles of sustainability and circular economy in order to provide people, communities, institutions and companies with an alternative model that respects the environment and integrates technological innovation into daily life. Each solution has the power to transform decarbonisation, electrification and digitalisation goals into sustainable actions for all, in order to build a more sustainable and efficient world together.