Sunshine tariff shows domestic DSR unviable under current market conditions

The Sunshine tariff project testing the ability of time of use (ToU) tariffs to promote domestic demand side response (DSR) has been completed with mixed results, suggesting homeowners are not able to shift enough demand to offset the need for grid upgrades.

The trial, which ran over 1 April – 30 September 2016, offered participants a smart meter and a reduced tariff rate of 5p/kWh between 10am-4pm compared to 18p/kWh for the remaining hours.

These ‘Sunshine hours’ were chosen as they were closest to the income received by a solar generator through the feed-in tariff and therefore could create a greater sense of connection between the customer and the solar farm.

The results of the joint project between Western Power Distribution (WPD), Wadebridge Renewable Energy Network, Tempus Energy and Regen SW showed that those on the Sunshine Tariff on average shifted 10% of their demand compared to the control group.

The analysis states that in order to offset the generation from a 250kW solar farm approximately 650 Sunshine Tariff customers would be required, around 20% of the homes in Wadebridge where the trial took place.

The group of households using automation technology were able to shift 13% of their consumption into the 10am - 4pm period compared to 5% for those without automation, suggesting just 360 Sunshine Tariff customers would be required to offset generation from the same size solar farm.

While this demonstrates the potential of automated control technology in shifting electricity consumption to the middle of the day, the project showed that domestic DSR is only able to shift limited demand.

The 10% average is well below the amount needed to convince WPD to consider offering an offset grid connection to WREN, a community energy group in Cornwall, which had to abandon plans to develop up to 4MW of solar as it could not connect to the WPD network at an affordable price.

To offset constraints on the local energy system, the DNO offers alternative connections to give developers a cheaper connection option that doesn’t require network reinforcement. Consequently, the developer has to accept that its generator may be disconnected when the network is at capacity.

The reduction in income and the uncertainty of how often generation will be curtailed can make projects unviable, such as in the case of WREN which was offered a ‘timed connection’ curtailing generation during the farm’s most productive time of 10am - 4pm from April to September.

Kevin Smith, communications director for WREN, said: “We were hoping the effect might be bigger because that would have moved us some way towards the possibility of an offset connection to the network with WPD which could have opened up a line of community investment in a solar farm.”

The project struggled to gain a large enough group of participants to take part in the trial, which attracted just 46 households, plus a 15 strong control group, instead of the 240 target.

Smith claimed the “inertia of people when it comes to switching” was largely to blame, with many potential participants turning down the opportunity to take part as “it would be too difficult or they didn’t want to bother”.

For those that did take part, many were unable to reach higher levels of shifting as many households’ energy demand from appliances and other sources did not amount to a considerable amount of energy.

“We found that people thought they were switching more than they did. While people were making efforts to switch into that period, the overall effect was smaller than intuitively you would think,” Smith said.

The lack of popular take-up of domestic DSR under the project, and the limited DSR capacity available from average households, means the project was not able to deliver the desired affect for both WREN and WPD and offer a viable alternative to conventional reinforcement.

“From a DNO perspective, the sunshine tariff showed there is potential to make a tariff that financially incentivises demand shifting into the middle of the day,” explained Matt Watson, Innovation and low carbon networks engineer at WPD.

“However the practicalities of using such a tariff to allow the connection of additional generation isn’t feasible under market conditions. Difficulties recruiting customers and then getting sufficient load shifting limit the effects of such ToU tariffs.”

However, the project did demonstrate what is needed in order to have domestic DSR through ToU tariffs viable. WPD said in its conclusions that a good list of key enablers had been established, namely widespread smart metering and half hourly settlement; easy methods for switching suppliers; more load automation; and more flexible loads such as electric vehicles or storage.

"What it's revealed is that you actually need a more complex solution and personally I think that any solution that doesn't include storage as well as demand side shifting isn't going to get there, certainly for domestic,” Smith added.