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Suppliers should use DSM’s potential for flexibility

Press review: energate messenger
Vienna (energate) – Demand Side Management (DSM) is the intelligent control of power consumption by industry, businesses and private households. Energy suppliers should use much more of its potential and develop new business models from this, according to Johannes Püller, founder of the Austrian software company VisoTech, writing in an opinion piece.


“The use of renewable energy sources is continuously increasing and as a result flexibility is becoming ever more important. Alongside flexible power stations, which adjust their production to the power generated from wind turbines and photovoltaic systems, and storage facilities, which can temporarily store the renewable energy, DSM represents potential for flexibility which cannot be ignored and, at the same time, a possibility for new business models. Potential, which the energy suppliers should use for themselves, as if they do not do it, others will recognise the business opportunities and seize control from the suppliers.

For energy suppliers, DSM represents a possible area of improvement and a new source of income. Renewable energy is generated if the conditions allow it, i.e. if it sunny or windy. This energy can be stored in large, central pumped storage plants, although building these requires significant ecological impact, which increasingly leads to resistance amongst the general public against such construction projects. At the same time, almost every fridge, electric heater and boiler is an energy storage system, if smaller and decentralised. The potential lies in grouping several such decentralised energy consumers. However, only models which have a direct connection to the power spot market and which allow fully-automated control are viable in practice. Households could take part in the system either directly via their energy supplier or via an intermediary with an automated market connection. If the consumption of multiple decentralised devices is controlled so that it occurs when there is a lot of power available, it will be advantageous to the energy suppliers and to their customers. The model works by automatically closing the gap between consumers and energy suppliers. Smart metering is setting the tone by understanding the customer’s consumption and subsequently operating a win-win model for both parties. Demand Side Management simply enables new business models which should be utilised. For example, an energy supplier could connect a household’s fridge to the network for free to make this attractive to customers. However, it is not just in normal use that DSM has its advantages, the concept also helps in exceptional situations. This was demonstrated in Florida after Hurricane Irma, where targeted load management helped the system to remain somewhat stable despite the impacts to the network.

What is stopping the energy suppliers from implementing the new DSM business models themselves, instead of potentially allowing startups and intermediaries to take the helm who are already sensing their chance? Until now energy suppliers have been very quiet regarding the topic of marketing flexibilities. Even the network operators have said little, whilst DSM concepts (keyword – balance energy) would be more than helpful to ensure the security of supply. Do the established providers really want to wait for others to take the helm and challenge for business? It’s time to trade!”

Johannes Püller

Commentary published in: energate messenger 11.10.2017; © 2017 energate gmbh.

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