UK households set to miss out on DECC’s electricity demand reduction proposals

UK households, which account for 30% of UK electricity demand, and constitute the largest group of electricity users, are at risk of missing out on electricity demand reduction proposals as announced by DECC today.
The focus of the consultation on non-domestic and industrial electricity use risks sidelining the initiatives of incentivising demand reduction in the home.  Measures for behaviour change programmes and product efficiency (which must go hand-in-hand) are essential to facilitating the involvement of microgeneration technologies and the domestic sector in the Capacity Market.  Introduced in the Energy Bill, incorporating demand side response from the domestic sector will be key both in demand reduction and the development of smart grids and system balancing.
With the advent of smart meters, householders need to be encouraged to purchase products which can interface and respond to ‘time-of-use’ tariffs.  These are essential to maximising consumer engagement and behavioural change – both in reducing energy consumption and shifting time of usage – an important contribution in the UK’s move to a smarter grid.
‘Unintended consequences’ must also be avoided in relation to focusing on electricity demand reduction at the potential expense of overall energy reduction.  Over three quarters of energy use in our homes is for space and hot water heating, so the potential for thermal storage of electricity to assist in grid balancing must not be overlooked.  As transport moves towards greater electrification, electricity use in the home will further increase, which could also have grid balancing uses.
Onsite power production should also be included under measures to stimulate permanent demand reduction.  Onsite and embedded generation reduce transmission and distribution losses which currently amount to nearly 8% of UK generation.  At low voltage customer losses go above 12%.  The total primary energy savings of technologies such as combined heat and power (CHP) should also be recognised in a permanent demand reduction incentive.
Emma Piercy, Head of Policy for the Micropower Council, commented:
“Whilst the MPC is disappointed about the lack of detail on measures for the domestic sector, we welcome the proposals to look at incentivising demand reduction by making a financial incentive available for behaviour change programmes and product efficiency.  The domestic sector has a huge contribution to make in reducing overall energy demand, and has the potential to be a key player in the Capacity Market as introduced in the Energy Bill.
The MPC looks forward to working with Government as the Energy Bill is amended during its passage through parliament to incorporate these new energy efficiency incentives.  Together we can ensure that consumer engagement and behavioural change are maximised, reducing energy consumption, energy bills and assisting the UK’s move to a smarter grid.”

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