Introducing Demand Side Response (DSR)

13 May 2021 | Celia Topping

Demand Side Response (DSR). Doesn’t exactly roll off the tongue, does it? Yet it’s a valuable tool in the UK’s transition to a zero carbon energy system. In this article we’ll be taking a closer look at how the UK’s energy system is changing, as we move away from fossil fuels and generate more of our electricity through renewables. These changes mean a huge shift in how energy is generated, used and redistributed. And that’s where DSR comes into play.  

What is Demand Side Response?

DSR is all about intelligent energy use. It’s a way of shifting demand to help balance the grid – by softening peaks, and filling troughs when there’s a surge or shortfall of energy. So for example, when the nation’s glued to the Masterchef final, there’s a huge demand for electricity. And that’s when DSR can be really useful – triggering devices like electric car batteries or home storage batteries to export some of their stored energy back to the grid. This way, we don’t have to resort to burning fossil fuels to make up for the shortfall. 

To really get to grips with DSR, let’s look first at how our energy system works, and how we’d like it to work in the near future. 

How does the National Grid work?

Fortunately in the UK, blackouts don’t happen that often. That’s because the grid does a pretty good job of maintaining the balance between our electricity supply and demand – and keeping the frequency of the grid at its optimum 50Hz1. The National Grid needs to keep a synchronised, steady 50Hz across all connected systems. Any diversion that shifts +/- 1% from this level could cause serious damage, and blackouts across the country.


Demand Side Response

In the past, fossil fuels gave a steady, predictable supply of power – as they could be burned on demand. But as we’re aiming to cut out fossil fuels altogether, we need a new approach.

To find out more about the National Grid, read our guide – which explains how to know when the grid is greenest, and how smart technology can help to deliver more sustainable and affordable energy.

How does our energy system need to change, to fight the climate crisis?

2 major contributors of carbon emissions are heating and transport. A key way of reducing these emissions is to electrify the system, use more renewable energy, and burn fewer fossil fuels. The British government recently made a crucial step, by banning the sale of petrol and diesel cars beyond 2030. In fact, predictions suggest there’ll be 11 million electric cars on our roads by then! And it’s estimated that by 2050, we’re going to need almost double the amount of electricity we use now2. So how do we manage this massive surge in demand, while cutting fossil fuel supply?

The 3 D’s: Decarbonisation, Decentralisation, Digitisation 

The 3 D’s are the foundation of an advanced, stable, and sustainable grid that can support the shift away from fossil fuels. 

What is decarbonisation? 

Fossil fuels release carbon dioxide – and too much of that causes global warming and climate change. We know this. So to create less carbon, we need to use renewable energy sources like solar, wind, hydro and geothermal to generate energy instead. 

We’ve been breaking records on this front in the last couple of years, but there are still challenges to overcome. 

Despite being greener and cleaner, renewable energies aren’t as easily predictable, due to the nature of...well...Nature. The sun doesn’t always shine, and the wind doesn’t always blow. So although we’re making tremendous progress in reducing carbon emissions, it can cause problems with the balance of supply and demand. This means a potential dropping away from that all-important 50Hz frequency – making a shortfall, or excess of energy more likely.  

What is decentralisation?

Traditionally, energy supply has been centralised and linear. A handful of large power plants chug away, to generate all the nation’s electricity and send it out across the grid to our homes. 

Decentralisation refers to the move away from this traditional system. Instead, generation is spread out across lots of smaller generators that feed nearby homes and businesses. By generating and using energy at a more local level, we can save money on massive infrastructure upgrades that cost billions of pounds. It also means that if there’s a problem, there isn’t a domino effect across the whole system – like in August 2019, when large swathes of the UK suffered a blackout3

What is digitisation?

With so many complex changes happening across the energy market – such as mass electrification and renewable power – it’s essential to manage and monitor the system digitally. Smart technology is the only way to understand what’s happening on the grid at any given moment, and then dynamically respond, to keep the lights on. 

So what kind of a response is needed? We think you may have an idea by now. Yes, a Demand Side Response!

What exactly does Demand Side Response do?

Simply put, DSR is the ability to coordinate when electrical devices take in, or give back, energy. So if there’s a surge of wind or solar power on the energy system, devices like electric cars and home-heating systems can “demand” this energy from the grid, and store it. 

On the other hand, if there’s a drop in supply, the grid can “demand” some energy back from these devices. This creates a great deal of flexibility in the grid, which is beneficial for everyone. Once it’s set up, DSR works as an automated request and response system, so the consumer doesn’t have to do a thing. Pretty clever eh?

So not only can DSR help us capture and store more green energy – but it can help balance the grid’s supply and demand, by reducing big peaks and troughs throughout the day. It’s a radical concept, which turns the traditional energy market on its head. Instead of paying for more power from the energy generators themselves, DSR redistributes energy from the end user. 

The smart software needed to make DSR a reality

In theory, DSR sounds great doesn’t it? Millions of devices working together to create a perfectly balanced grid, supplied by renewable energy. But the practicalities of making it work at scale are not so straightforward. 

OVO’s partner, intelligent software company, Kaluza, is working on smart technology which allows customers and their devices to connect with the energy system in entirely new ways. 

Kaluza uses smart software to connect individual devices in the home to local electricity networks. This enables the platform to control when the devices charge – taking into account not only when the customer needs to use their device, but also when demand is low, and the grid is at its greenest

So, not only can DSR enable our energy system to run off more green power and help keep the lights on, but it allows us to pay less for our energy without really having to do anything. 

How domestic users are beginning to get involved in Demand Side Response

Traditionally, the ability to shift energy back and forth between user and supplier in this way has only been available for large-scale commercial consumers. But, DSR tech is now opening up to small businesses, and even domestic users – creating a whole new dimension within our energy system. It’s energy flexibility at our fingertips.

Growing numbers of us are becoming more aware of where our energy comes from, and starting to actively manage it. With smart home tech like smart meters and In-Home Displays, we’re keeping track of how we’re using energy, making tweaks and cutting our bills. The rollout of smart meters hit 15 million in March 2021 – which is fantastic news for the environment, and consumers’ wallets. 

Smart technology is not only useful to the consumer, though. With half-hourly updates from 15 million homes (and counting), the grid can operate with greater efficiency, flexibility, and better manage supply and demand. 

DSR offers us a solution, giving the system a way of controlling demand, despite the fact that we can’t control the weather. And we’ve been able to turn DSR into a reality thanks to the latest advances in AI technology.

What’s an example of DSR in the domestic market?

Demand Side Response may be an unfamiliar term at the moment. But it’s already found its way into the domestic sector via Smart Export Guarantees (SEG). SEG is a smart idea where people with solar panels and wind turbines (or similar) get paid for putting home-generated green energy onto the grid. You can read all about Smart Export Guarantees, and how you could benefit from them in our guide. 

But this is only the beginning… 

What’s OVO doing to enable Demand Side Response in the domestic market?

We’re no ordinary energy supplier! We have a clear vision on how to achieve a net-zero carbon future, and we’re acting on that vision. Along with Kaluza, we’re developing pioneering smart technology that will transform the UK’s energy sector as we know it. 

Our trials and projects are starting to show, through real-life examples, how domestic DSR can bring flexibility and stability to the grid. Take a look at a few of the projects we’ve been working on… 

Electric vehicles (EVs)

Electric cars are a great example of where DSR works really well. We drive home, plug in our car, then forget about it until it’s time to leave the next morning. 

With the Kaluza smart charger, customers connect through an app and set a time when they want to have their car ready. Then the AI takes over, and works out the cheapest and greenest time to charge the car overnight. This evens out the demand for energy – meaning no huge surge, or the need for fossil-fuelled power stations to urgently switch on, to cope with peak-time demand. In fact, “peak times” could possibly become a thing of the past. 

OVO’s Drive Anytime tariff

The OVO Drive Anytime tariff allows members to charge up their EVs on energy that costs just 6p per kWh, at any time of day. This is a completely unique “type of use” tariff –  as most other EV tariffs need customers to plug in at certain times, to be guaranteed cheaper energy. 

The reason this tariff has been made possible is down to Kaluza’s intelligent DSR system. The platform constantly monitors when energy is cheapest throughout the day – and ensures that cars power up only at those times. This proves DSR has the power to save our members money, while enabling the transition to a zero carbon grid.  

The Vehicle-to-Grid (V2G) trial

We launched this trial back in 2018, and it’s now the largest domestic V2G project in the world. The V2G game-changing tech enables EV owners to feed the energy stored in their car’s battery back into the grid when needed. 

Thanks to Kaluza’s V2G charger, EV owners can set their car to charge automatically when energy is greener and cheaper. Then, at times of peak demand, when the grid gets a bit low on energy, power can be fed back to the grid from the EV’s battery. Not only balancing the grid, but also paying the EV owner in the process. One trialist, David from Luton, reports that he made an annual profit of £700-£9004 through his smart V2G charger!

Proof of the project’s ongoing success was shown during a recent electricity supply crunch. In November 2020, OVO’s V2G triallists were called upon to export energy from their cars back to the grid in a time of peak demand. Blackout averted. And a superb example of how DSR can offer flex to the grid. 

It’s mind-blowing to consider that if all 215,000 pure EVs in the UK were V2G-enabled, they’d be able to feed nearly 1.5 GW of green energy back to the grid, every day! That’s enough to power 200,000 homes at peak time. By 2030, with millions more EVs on the road, the power available could reach as much as 33 GW5

Project Smile

It’s pretty blustery on the Scottish island of Orkney. So much so, that the wind turbines installed there generate far more electricity than the network can handle. This can lead to the turbines being turned off. The loss of this potential energy could add up to a staggering £3million per year. So avoiding that scenario is vital to saving money in the renewable energy market. 

Project Smile is doing just that – by storing excess wind energy in domestic systems like storage heaters, hot water tanks, heat pumps, storage batteries and EVs across the island. 

Kaluza’s intelligent platform knows when the network is reaching its limit, and can switch on these devices to soak up the excess energy. Meaning Orkney residents get cheaper, greener energy, and nothing goes to waste. Ok, so Orkney is a small community. But by trialling our technology here, we can start to understand how our innovations could be scaled up to a national level. 

Heat Smart Orkney from Kaluza on Vimeo.

Sonnen battery trial

Solar power is the cheapest source of energy worldwide – and with technology costs dropping rapidly, it’s on the verge of going mainstream. So it made sense for us to find out how we can benefit from the sun’s power, even when it’s not shining. Sonnen batteries store solar energy harnessed from solar panels  – so we wanted to test how well they can support the local grid at peak times.

The renewable solar energy stored in the batteries can be used later by homes, or fed back to the grid when it’s needed. Again, Kaluza’s smart tech can do this automatically, switching devices on or off as necessary.

Home battery storage is all part of the interconnected, decentralized network of devices that can create a greener, smarter energy system of the future. 

Interested to find out more about home energy storage, and see if it's right for you? Read our quick guide to home energy storage to learn more.

“In 2021, as people buy more EVs and smart-connected devices, our capacity to add domestic-driven flexibility to the energy system will grow. We’ll essentially establish a network of batteries in people’s homes that, with the right AI-enabled tech, can save them money, draw more power from renewables and help balance the grid.”

Marzia Zafar, Head of Strategy and Policy, Kaluza.

As DSR technology develops, we’re all going to be able to play a bigger part in balancing out the nation’s electricity needs. One of of Kaluza’s key findings is that through residential flexibility of this kind, we could save £6.9bn/year on the electricity system costs6

Read our guide to find out more about how smart technology can help to deliver sustainable and affordable energy.

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How can businesses get involved in DSR

Getting involved in DSR makes perfect sense for any business that’s environmentally responsible, and wants to play a role in the transition to a low carbon energy system. 

DSR offers big incentives, including lower bills, and the chance to reduce carbon emissions. And the great news is DSR is very low-risk. The main concern is about potential interruption to operations. But such disruption is extremely rare. 

The very largest businesses work directly with the National Grid to establish their DSR. But most work through their regional Distribution Network Operators (DNOs), and aggregators like Flexitricity, Kiwi Power or Boston Renewables. Aggregators help businesses of all sizes make the most of DSR, delivering everything from design and planning to installation and maintenance.

It’s relatively inexpensive to set up DSR – and it can reap big benefits, both financially and environmentally. 

Why is Demand Side Response important for a greener future?

If we want our electricity to come from clean, renewable sources, we need to get good at balancing supply and demand. As DSR develops, it will become a powerful weapon in our green arsenal, in the fight against climate change

It’s hoped that DSR will soon be able to meet 30–50% of all balancing capability on the grid. This means lower carbon emissions, and more efficient use of our natural resources and electricity generators. Watch this space for further developments – we’ll be sure to keep you informed! 

Want to keep the conversation going? Check out the OVO Forum

We have thousands of topics being discussed by enthusiastic OVO members on the OVO Forum. If you’re interested in DSR, or any other hot energy topic, check it out – you’ll almost certainly find a like-minded soul within the community that you can chat tech with all day long!  

Your future with OVO

By choosing OVO to supply your energy,  you’re contributing to the development of a zero carbon energy system. Being an OVO member means you’re part of a community of people making positive changes to lower carbon emissions, for a cleaner, greener future. 

We’ve also created the OVO Greenlight tool, to help you understand your carbon emissions, and learn how to lighten your carbon footprint. The tool is available to all OVO members, on any of our green home energy plans

Join OVO today, and find out how you can become a carbon-crunching community member! We don’t only offer 100% renewable electricity as standard7, but also:

  • A tree planted in your name every single year you’re with us8
  • Access to OVO Greenlight: free energy-saving tips
  • 3-5% Interest Rewards for every year your account has a positive balance9
  • An award-winning smart meter experience (Uswitch 2020)
  • A £50 gift card every time you introduce a friend to us

Join us and become part of the future of energy! 

Sources and references:  


2.   McKinsey,The Global Energy Perspective 2021 report.



5. If 50% of the 11 million EVs by 2030 were V2G enabled, this would open up 22 TWh of flexible EV discharging capacity per year and could provide ~33GW of daily flexible capacity to help and balance the grid - which highlights the enormous potential of V2G to help manage a grid with high renewable penetration.


7. 100% of the renewable electricity we sell is backed by renewable certificates (Renewable Energy Guarantee of Origin certificates (REGOs)). See here for details on Renewable Energy Guarantee of Origin certificates and how these work. A proportion of the electricity we sell is also purchased directly from renewable generators in the UK.

8. Each year, OVO plants 1 tree for every member in partnership with the Woodland Trust. Trees absorb carbon dioxide from the atmosphere, so tree-planting helps to slow down climate change.

9.  Interest Rewards are paid on credit balances of customers paying by monthly Direct Debit. It is calculated at 3% in your first year, 4% in your second year and 5% in your third year (and every year thereafter) if you pay by Direct Debit. Interest Rewards are paid monthly based on the number of days you have a positive balance and the amount left in your account after you’ve paid your bill. Full terms apply

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