Adapt or die in fast-changing grid-balancing market

Up to half of demand-side-response services companies are likely to disappear over the next two years, favouring those with more experience and the technical expertise to act quickly

Michael Phelan, chief executive and co-founder, Endeco TechnologiesReducing the amount of electricity used at peak times of the day provides intensive energy users with opportunities to reduce operational costs and generate new, long-term, recurring revenue streams while supporting the UK’s green goals through renewable energy.

However, not all demand-side-response (DSR) services are the same. Many aggregators, whose early business models relied on reserve-balancing schemes with slower response times, are finding that profit margins no longer exist. Older, reserve balancing schemes are based on post-fault notifications rather than real-time grid frequency events and may require equipment to be turned off for up to two hours. Revenues are now far lower for these outdated schemes. In fact, you might say that the market for traditional reserve balancing services, such as short-term operating reserve, is dead.

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