Analysis of Energy Resources, Regulations, and Demand Side Response

This report provides a critical analysis of demand-side management strategies, focusing on the drivers and barriers to their implementation within the context of energy resources and regulations. It explores the concept of demand side response as a tool for balancing the electricity network by adjusting energy consumption and increasing demand flexibility. The report discusses the benefits of demand side response, such as improving system efficiency and reducing greenhouse gas emissions, while also addressing barriers like market structure, regulatory arrangements, and economic incentives. Furthermore, it examines the role of distributed generation, including its environmental impacts and opportunities for revenue generation through residential installations. The report also touches upon the UK's commitment to reducing greenhouse gas emissions and the potential for energy efficiency improvements across various sectors. Finally, the financial and technological trends brought about by regulations in the UK are also explored.

Running head: MANAGING ENERGY RESOURCES AND REGULATIONS
Managing Energy Resources and Regulations
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1MANAGING ENERGY RESOURCES AND REGULATIONS
Table of Contents
Introduction:...............................................................................................................................2
Demand side responses:.............................................................................................................2
Barriers to demand side response:..............................................................................................4
Distribution generation:.............................................................................................................5
Environmental impact of Distributed Generation:.....................................................................6
Demand reduction:.....................................................................................................................7
Financial and technological trends brought about by regulations in UK:..................................8
Conclusion:..............................................................................................................................10
Reference List:.........................................................................................................................11

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Introduction:
The demand side response is concerned with the intelligent use of energy. With the
help of demand side response services, businesses and customers can turn up, down or may
shift in real time. The demand side response is regarded as the vital tool in helping to make a
secure sustainable, secure and affordable electricity system (Behrangrad 2015). It helps in
understanding that the peaks in the demand and fill in troughs, particularly during the
instances when the power is more abundant, affordable and clean.
For the business and the customers, the demand side response is regarded as the smart
method of saving on the total costs of energy and reducing the carbon footprint. By
promoting greater and wider participation the problems of industry can be turned into the
customer opportunity. The current report is based on critical analysis of the demand side
management strategies and explaining the drivers of and barriers to their implementations.
Considerations would also be paid in respect of technological and financial trends bought in
by the regulations in the United Kingdom.
Demand side responses:
Demand side responses is regarded as one of the key demand management measures
that are available to assist balancing the network. The demand side response addresses the
balancing constraints by adjusting the energy consumption with the objective of mitigating
over of under supply. By altering the profile of the demand and growing the flexibility of the
demand side response, DSR can help the market of electricity to adopt the availability of the
supply and demand requirements (Spence et al. 2015). The Demand side responses inspires
the customers in undertaking short term shifting of demand i.e., to increase and decrease the
consumptions in order to increase the export or take up the excess energy from the electricity
network.

3MANAGING ENERGY RESOURCES AND REGULATIONS
There are other demand side management tools that comprises of energy efficiency
and distributed energy. The energy efficiency helps in reducing the demand permanently and
comprises of the measures namely the building insulation, more efficient lighting solutions,
with higher efficiency boilers etc. Distributed energy can be defined as generation of power
on the system such as system for storage and standalone distribution units etc.
The respondents from interview has stated several benefits of demand side response
and have even argued that demand side response could produce value for the GB system by
introducing greater amount of efficiency in respect of system capacity (Li et al. 2017).
Introducing greater efficiency helps in guaranteeing sufficient supply of security at a
potentially lower costs than the thermal generation. Another benefits of demand side
responses is potentially reducing the greenhouses gas emission by lowering the demand for
higher emission peaking plant to create a balance in the system. In context of UK this is
important in moving towards the low carbon economy where there will a constraint in the
system by the intermittent generation (Goulden et al. 2014). Making effective utilization of
plant help in reducing the greenhouse gases emission and resource consumption.
An acknowledgement has been put forward by interviewees which states the benefits
of DSR is difficult to quantify, even though some have pointed in the direction of specific
papers for indicative estimates (Gelazanskas and Gamage 2014). For instance, a report
specially made by Energy UK public data states that 20% of the peak demand of 12GW can
be successfully shifted on demand. A report prepared by the sustainability first defined that
the technical potential of demand management is capped at system peaks which ranges
between 33% during winter and 29% during summer.

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Barriers to demand side response:
There were several respondents of interview that have expressed their concern that
inadequate measures were adopted to develop the market for the demand side response and
demand side management in GB. The respondents also mentioned that a number of barriers is
present in the roll out of DSR products and technology (Wu, Tazvinga and Xia 2015). The
respondents from the interview stated number of barriers in the disposition of demand side
response. The key areas include concerns relating to market structure and regulatory
arrangements.
The network of distribution is presently built with sufficient capacity of network to
accommodate peak flows. Consequently, there wasn’t any requirement of network operators
to enthusiastically administer their networks (Arteconi et al. 2017). The increasing diffusion
of renewables together with distribution networks and continuous decline in industries and
large scale demand the system needs further investment in flexibility that can be provided by
demand side response. Demand side response can be viewed as one of the possible solution
but requires evolution in elasticity market and commercial arrangements to encourage the
suppliers, aggregators and consumers.
Another barrier to demand side response is the economic barriers. Consumers needs
financial incentives to alter their patterns of electricity consumptions. This needs investment
in terms of both the money and effort by the customers (López et al. 2015). It also exposes
them to the risk of not delivering services for which they liable for penalties. In order to make
the participation attractive the benefits should offset the costs and risks.
The regulatory requirements states that the energy policy of the UK government has
largely focussed on permanent reduction of demand with the measures namely the Green
Deal and the Energy Saving Opportunity Scheme (Finn and Fitzpatrick 2014). Most of the

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demand side responses have the access to the wholesale and the balancing market. Hence the
inability of the demand side participants to access the balancing markets and the wholesale
markets may create a knock on the effects of capacity market.
Distribution generation:
Distribution can be defined as the embedded generation. Distributed Generation is
regarded as the electricity generation plant which is connected to the network of distribution
instead of the transmission network (Behrangrad 2015). There are numerous types and size of
distribution generation that included combined heat and power plants, wind farms,
hydroelectric power or any one of the innovating smaller generation.
Over the recent years a dramatic growth has been noticed in the number of
distribution generators that seek to connect with the distribution network. Carrying forward
the dramatic growth in the volume of connections there has been concerns where customers
are experiencing certain numbers of difficulties in navigating their way with the help of
connection procedure. Distribution network is referred as the variety of technologies which
enable the supply of the power at or near the solar panels, heat pumps and batteries (Finn and
Fitzpatrick 2014). These small scale assets is denoted to distributed energy resources and as a
result of this they are turning out to be increasingly cost effective and in demand.
Distributed Generated resources establishes more sustainable and cost effective mix to
the consumers. The growth is largely driven by the competitiveness of the solar, wind and
battery technologies. Identical to almost every industrial activity, the development of these
distributed generation has resulted an exponential learning curve (Sheikhi et al. 2015). This is
because with the increase in volume and building of knowledge there is a drop in price.
While prices have not yet dropped to the level of whole sale electricity price level.

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The distributed energy responses have additional benefits such as reducing the needs
of the expensive peaker plants, diminishing spending on the new transmission and lines of
distribution that increases the reliability of energy network. As the distribution energy
responses turn out to be more prevalent, they provide an opportunity to supplant the
traditional baseload generation and creates a disruption in the structure of the energy industry
value chain (Goulden et al. 2014). One of the key opportunities of acquiring the revenue is
installing the distributed energy resources in the households. The residential consumers will
be able to generate and store the energy which will further reduce their dependence on the
variability of grid price and enable them to sell energy locally at the selected times. A
connected community at homes would help in facilitating the energy collaboration by
communicating with each other to recognize the best time of purchasing or selling energy.
Environmental impact of Distributed Generation:
The distribution generation can help in benefiting the environment given that its use
lowers the volume of electricity that should be produced at the central power plant. This can
in turn lower the ecological effects of the centralized generation (Sheng et al. 2016). The
current cost effective distributed generation technologies can be considered useful in
generating energy at households and business that are consuming renewable source of energy
such as solar and wind energy. Additionally, the distributed generation can help in harnessing
the energy that may otherwise be wasted for instance through a collective heat and system of
power.
By making use of the local energy resources the distribution generation helps in
reducing or eliminating the wasted energy which happens during the transmission and
distribution in the electricity distribution system (Sedghi et al. 2016). Despite the benefits of
distributed generation there are certain negative environmental impacts.

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The distributed generation system need a footprint and as they are situated close to the
end users, there are some distributed generation system which may not be pleasing to the eye
and may result in land usage concern. The distribution generation technologies that comprises
of incineration especially burning fossil fuels can generate several similar sorts of effects
since bigger fossil fuel power plants causes’ air pollution (Muñoz-Delgado et al. 2015). The
impacts from the bigger fossil fuel might be smaller in scale but might be closely located to
the populated areas. There are some distributed generation technologies namely the waste
burning, biomass burning and collective heat and power might need water for the purpose of
steam generation and cooling (Rahbari-Asr et al. 2014). The distributed generation system
which makes the use of combustion might be less significant than the centralized power
plants because of the efficacies of scale. Distributed energy technologies might result in
undesirable ecological problems upon the conclusion of their useful life when the same is
substituted or detached.
Demand reduction:
UK has already made commitment of reducing by 34% in the emission of the green
house by the year 2020. This could be regarded as the big step forward however in actual
word it is very unlikely to be considered as the big step of stopping temperatures rising to
levels which results in extreme weather happenings and droughts. Hence a developed nations
like UK is required to go further (Sheng et al. 2016). This does not signifies that dropping the
standard of living would help in reducing the emission. Wastefulness is rightly build into the
system that is used by the individuals. There are several power plants that emits around two
thirds of the waste contributing to the emission with homes and office structures are poorly
insulated. However, the government research estimated that people in UK can reduce the
usage of energy by 30 per cent across the board and save around £12 billion each year
through reduced bills and by improving the energy efficiency.

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The UK research council have issued supervision for the native public and other
public regarding the lower carbon emission in their areas. A guidance has been issued
relating to the greenhouse gas emission reportage and the procedure of publishing for the
native authorities (Adefarati and Bansal 2016). The objective of this direction is to inspire the
native authorities in reporting the emission and helping them to submit and understand the
numbers. The guide to the funding energy efficiency issued in the community segment
provides explanation regarding the availability of the choices which is obtainable for the
public sector organization to assist measures in fund efficiency.
Additionally, model energy performance contracts has been issued as the method
intended to help the public sector organization to remodel their buildings by applying the
energy preservation actions as the means of reducing carbon emission and attaining
substantial amount of yearly cost savings.
Programmes such as street lightning toolkit launched during February 2015 is viewed
as the tool of assistance to the local authorities in applying the street lightning or exterior
lightning projects which would help in improving energy efficiency with reduced
consumptions of carbon and generating significant financial savings. The toolkit is designed
with financial tool with the objective of helping the local authorities to compute the probable
savings costs with separate guidance of document incorporation on the developing business
(Barr and Majumder 2015). Energy efficiency strategy has been set down to maximise the
current energy efficacy strategy and comprehend the IK wider energy efficiency policy over
the upcoming times.
Financial and technological trends brought about by regulations in UK:
The demand side management helps in reducing the loads of electricity from the end
users or the customers with the help of efficient energy and load shipping measures

9MANAGING ENERGY RESOURCES AND REGULATIONS
(Adefarati and Bansal 2016). Successful demand side management programs is encouraged
by the requirements of state incentive and fiscal arrangements that decrease the quantity of
energy usage by decreasing the requirement of new generation sources.
On the other hand the welfares of energy efficient technologies is computed by
matching the avoided generation expenses and by avoiding electricity subsidies with the loss
of revenue from the lower sales of electricity and subsidy of energy efficient technologies.
The demand side management programmes is used to cut down or lessen the supplementary
peak or base of weight generation capacity along with the distribution facilities (Muñoz-
Delgado et al. 2015). The real advantage under the higher developed economies is that new
equipment is considered to be far cheaper rather than improving the current equipment.
According to the findings of World Bank losing such opportunity rather than building new
cost-cutting would result in serious monetary, ecological and community consequences.
Utility demand side management strategies are regarded as the measure of resources
acquisition. In other words it aims in balancing the options of supply side and measures of
demand side options at the macroeconomic level till the marginal costs of the traditional and
alternate energy supply side choices is equal to the marginal cost of the demand side choices.
According to Sheng et al. (2016) the end use energy efficiency improvements offer
several benefits. This benefits includes higher competence with direct and indirect monetary
benefits to the customers and community by lowering the requirement for supplementary
supply, distribution facilities, lower customer energy costs and mitigating the risks from the
yet to come price variations. Therefore, it can be stated that efficiency investment can help in
stimulating the economic growth with improved energy security in UK.
UK must offer financial incentive to promote the use of the energy efficient lightning.
Several scholars have viewed this programmes as the primary step towards the lease cost

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utility planning however concludes by stating that new policies requires removing the
financial rules that favour investment in supply to investment in customer or end-use
efficiency (Goulden et al. 2014).
Conclusion:
Following an in depth analysis a conclusion is reached that peak demand reduction
with better building envelop lower energy cooling and heating along with social practices
would help in reducing the energy consumption. The community level and city level energy
efficient technologies would help in providing guidance for the urban planning and
implementing community design along with the management of energy. The study evidently
puts forward that integration of the information, communication and the technologies of
renewable energy at the building, community and city level intervention would help in
reducing the energy emission.

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