Why DSR Is – in Addition to cPPA – an Acronym Worth Remembering

Why DSR Is – in Addition to cPPA – an Acronym Worth Remembering
Let’s start by outlining the general situation in the energy market. The increase in the volume of energy generated by renewable energy sources is a fact. The consequence of introducing weather-dependent energy sources into the power system has resulted in energy being readily available some of the time – sometimes there is even too much of it. Still, at other times there is a shortage. Demand and supply adjustment mechanisms can be twofold in this situation: market-based, in which we see information about the availability of energy through a price that depends on supply and demand, resulting in large fluctuations in energy prices; administrative, when we have forced shutdowns of some sources when there is a lot of energy, which can be very cheap, as well as customer shutdowns when energy is scarce and can be very expensive.

In the past, for the end user, production processes did not depend on energy availability regardless of regulatory mechanisms, because the energy was, and often at a fixed price. This is no longer the case. And this is where an acronym worth remembering – DSR (Demand Side Response) – comes in.

What is DSR?

DSR is defined by the Polish Power Grid (PSE) as a system service that stabilises the operation of the National Electricity System when there is a shortage of generation capacity. It consists of a voluntary, short-term reduction of energy consumption or its postponement upon request by PSE in exchange for remuneration.

In a broader sense, DSR is the adjustment of customers’ energy demand to the situation in the power system or the energy market. DSR allows customers to respond whether there is a non-market outage or a market situation with large energy price differences. In the case of the former, the customer has 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 offering DSR services also allow 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, like those related to energy efficiency such as Lerta’s 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 organisational activities that produce the same effect as electricity storage. The aggregator in this case indicates how to achieve this effect more cheaply.

Of course, not everything will be solved using DSR. It is worth considering participation in this program in combination with your own generation source and energy storage.

How can I join the DSR program and what does participation entail?

All you have to do is apply to an aggregator, sign a contract and follow their instructions. Aggregators 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.

There is also one more aspect of the DSR program that is worth nothing.

Currently, the best way to optimise energy consumption is not always to reduce it, but to match the consumption with the price level in the market. In this way, even if a little more energy is consumed annually, it can still be cheaper, and also provide additional income in exchange for flexibility.

The Green Transition – 100% Renewables

The changing energy landscape, called the green transition, diversifies generation sources to achieve 100% renewable energy. 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 just one of the solutions available to energy consumers through our Virtual Power Plant.

Being an aggregator, we combine different entities. The smallest company we aggregate has declared a reduction of 30 kW, and the largest is 45 MW (45,000 kW).

For any questions about DSR or our other clean energy solutions, please feel free to contact our company.

Krzysztof Müller 
General Manager
Origination & Trading
Photon Energy Group