Why DSR is – besides cPPA – another acronym worth remembering
Let’s start by outlining the general situation in the energy market. The increase in the volume of energy generated by RES is a fact. The consequence of the introduction of weather-dependent energy sources into the power system has resulted in the fact that at some moments energy is readily available, sometimes there is even too much of it, and at other moments it is in short supply. The mechanisms for adjusting demand and supply can be twofold in this situation: market-based, in which we see information about the availability of energy through a price that depends on demand and supply, resulting in large fluctuations in energy prices; administrative, when we have a situation of forced shutdowns of some sources when there is a lot of energy and it can be very cheap, and a situation of customer shutdowns when energy is scarce and can be very expensive.
For the end consumer, regardless of regulatory mechanisms, the situation when his production processes did not depend on the availability of energy, because it just was, and often at a fixed price… is over. And this is where the acronym worth remembering – DSR, or Demand Side Response – comes in .
What is DSR?
DSR is defined by the Polish Power Grid (PSE) as a system service that stabilizes the operation of the National Electricity System when there is a shortage of generation capacity. It consists in voluntary and short-term reduction of energy consumption or its postponement at the call of PSE in exchange for remuneration.
In a broader sense, DSR is the adjustment of consumers’ energy demand to the situation in the power system or the energy market. DSR allows you to respond whether you have a non-market outage situation or a market situation with large energy price differences. In the case of the former you have to cut back, in the latter it is sometimes worth it.
Who can benefit from the DSR program?
Thanks to the fact that there are certified aggregators in the Power Market (Lerta, which recently joined Photon Energy Group is one of them), it is safe to say that any company or institution that has the potential to reduce power (including generation sources). This is because aggregators, by offering DSR service, also enable those entities that would not meet the PSE requirements on their own to benefit from the program; moreover, they often not only take on the risk of a failed reduction, but offer a package of additional services such as those related to energy efficiency, such as the Lerta Energy Management System.
As it turns out, many companies are unaware of their reduction potential. The aggregator can therefore support its customers in two ways: with guaranteed financial gratification for their energy flexibility, and by providing them with knowledge of their potential. Indeed, it can be said that the second definition of DSR is a set of technical and organizational activities with the same effect as an electricity storage facility. The aggregator in this case shows how to achieve this effect more cheaply.
Of course, not everything will be solved using DSR. It is worth considering participation in DSR in combination with your own generation source and energy storage.
How to join the DSR and what does participation entail?
Getting an accession is relatively easy. All you have to do is apply to the aggregator, sign a contract with it and follow its instructions. Aggregators often make sure that participating entities receive timely information about the planned reduction call and can adjust production processes, and they also support the execution of the reduction itself.
One more aspect of using the DSR program is worth noting. Nowadays, optimization of energy consumption is not always a reduction in energy consumption, but an adjustment of this consumption to the price level in the market. Thus, it is possible to consume even a little more energy on an annual basis, but definitely more cheaply and with the awareness of using renewable energy sources, and earn additional income for your flexibility.
Green transformation, or 100% RES
The changing energy landscape, referred to as the green transition, is essentially a diversification of generation sources aimed at achieving 100% RES. Operating in such a system is a challenge that can be met by virtual power plants, including the Lerta Virtual Power Plant currently in Photon Energy’s inventory. The DSR mechanism is one of the solutions available to energy consumers within the Virtual Power Plant. Being an aggregator, we connect various entities. The smallest plant we aggregate has declared a reduction of 30 kW, and the largest 45 MW (45,000 kW).
If you have questions about DSR or our other clean energy solutions, I invite you to contact our company.
Krzysztof Müller
general manager
Origination & Trading
Photon Energy Group