What is demand response? Demand response is when your site reduces electricity use, moves some electricity use to another time, or uses stored battery energy instead of drawing from the grid. In return, you may receive:
- A lower bill from your supplier
- A payment from the grid
- Trading revenue from the wholesale market
You do this by changing when equipment like batteries, EV chargers, heating, cooling and refrigeration runs, charges or discharges. In this article, find out how demand side response (DSR) works and whether your site is a good fit.
Why the grid pays you to be flexible with how you use electricity
Electricity supply and demand have to stay balanced every second. That is getting harder as wind and solar take a larger share of GB supply, because their output changes with the weather and time of day. At the same time, EV chargers and heat pumps are adding new demand. Demand response gives the grid another way to keep that balance.
Flexibility also helps at the local level. Network capacity, meaning how much power the local wires can carry, is tight in many parts of GB. If a site wants to connect new equipment or draw more from the grid, the wait can be years. Instead of building out the network, the grid can ask sites to reduce demand when the local network is busy. This is called flexible demand, also known as demand side flexibility.
Four signals that ask your site to respond
Sites usually act when one of four factors changes:
- a grid signal, meaning the electricity system needs help right then
- a price signal, meaning power is cheaper or more expensive than usual
- a market signal, meaning electricity prices have moved enough to be worth acting on
- a supplier/aggregator signal, meaning your electricity supplier asks you to use power at a different time
Three actions you can take
When a signal comes, sites usually do one of three things:
- reduce grid import, meaning take less power from the grid for a short time
- shift consumption, meaning use power at a different time of day
- change asset behaviour, meaning equipment like your battery or heavy machinery works differently
How you get paid
The incentive is what makes responding worth it. It might be a payment, a lower bill, or money from trading. Here are the three main routes:
| Route | What the site does | How it pays |
|---|---|---|
| National programme (like the Demand Flexibility Service) | When the grid asks, the site reduces demand, changes when it uses electricity, or runs its battery | A reward or payment through your supplier, aggregator or flexibility provider if the site delivers the agreed response |
| Electricity tariff | Runs equipment in cheap hours. When prices are high, pauses some equipment or uses the battery | A lower bill instead of a separate payment |
| Energy markets (battery needed) | Charges the battery when electricity is cheap, then exports or changes battery behaviour when market value is high | Market-linked revenue, on top of the usual bill savings, for eligible GB sites |
Many sites use more than one route. The best option depends on your meter setup, battery size, site limits and which market routes you can access.
Where batteries fit into demand response
The battery on your site needs a control strategy to manage demand response. This strategy decides what the battery does with its stored energy at each point in the day.
At any time, it has one of these four options to choose from. Its job is to select the one that delivers the best overall value, while staying within your site’s operating rules.
| Battery option | What it means | When to choose it |
|---|---|---|
| Use on site now | The battery powers your building, so the site doesn't buy expensive electricity from the grid | When grid power costs more than the battery's other available options |
| Save for later | The battery keeps its charge for a busy time | When the site will draw lots of power later, and using the battery then will keep the bill lower |
| Hold for the grid | The battery stays ready in case the grid asks for help | When a grid programme would pay more than using the power on site |
| Sell to the wholesale market | The battery sends power out to the wholesale market when prices are high | When site needs are covered and the battery has spare capacity available |
Here's a simple example.
A cold storage warehouse keeps its battery for the late-afternoon peak. That's when delivery vans come back to charge, and grid prices are at their highest.
If the grid asks for help at 4pm, the battery only responds if there's still enough charge for the protected loads, meaning the fridges and other equipment vital for running.
Frozen food has to stay cold first. If there's spare battery capacity after that, the battery can send some power to the grid. When the control strategy works well, the site can protect operations first, then use whatever flexibility remains to reduce costs or earn revenue.
What can you safely flex on a commercial site?
Before joining any demand response programme, the first step is mapping which loads can flex and which must stay protected.
Loads that can flex
Flexible assets are equipment and machinery that can change when they use power.
Non-essential loads and flexible loads are the parts of your site that can pause, reduce or move to another time for a short period without hurting operations. Examples include:
- Hotels: A hotel turns the heating down at peak times in summer as guest rooms will still feel comfortable enough
- Supermarkets: A supermarket pre-cools its fridges before the peak, then runs them less hard during it so food stays cold and safe
- EV charging: A delivery company charges its vans at night, when power is cheap because its vans don't leave until morning
Process loads are different, because stopping the power often means stopping work altogether. Examples include:
- Factories: A car factory can't pause its assembly line suddenly as stopping impacts output, and restarting takes time
- Bakery ovens: A bakery can't pause an oven mid-bake as the bread will come out wrong but it can plan its baking for cheaper hours
- Bottling lines: A drinks bottling plant shouldn't halt mid-run as sudden stops cause jams, spills and waste
Loads that you need to keep on
Not every part of a site can flex. Safety systems, emergency lighting and critical equipment must stay on no matter what the grid is doing. For example, a care home can't let bedrooms drop below safe temperatures and a hospital can't switch off or reduce critical medical equipment.
| Site area | Could flex? | What to protect |
|---|---|---|
| Battery charging | Often | Enough charge for power cuts and the site's later busy moments |
| EV charging | Often | Every driver leaving with the charge they need |
| Heating and cooling | Sometimes | Comfortable temperatures, especially in care homes and customer spaces |
| Refrigeration | Sometimes | Food safety and the cold chain |
| Process loads | Sometimes | Product quality and meeting delivery deadlines |
| Safety systems | No | These must always run |
Site constraints to map upfront
These rules are called site constraints. They cover:
- Safe limits: the temperatures, pressures and settings your operations need to stay within
- Service commitments: what you've promised to customers, staff or residents (charger availability, care continuity, hot water)
- Critical processes: the things that can't be interrupted without disrupting the site
- Protected loads: the equipment that must stay on even when the rest of the site flexes (safety systems, the cold chain)
- Backup needs: what you need to keep running through a power cut
Mapping these constraints up front means your battery's software knows which loads it can adjust, and which ones must stay protected.
Demand response vs peak shaving
Peak shaving lowers your own demand spikes by using a battery to provide electricity at these times. Demand response reacts to an external signal, such as a grid event, supplier request, market price or tariff change. Act on the signal and you may earn a payment or save on the bill.
Your battery can do both demand response and peak shaving. The software running the control strategy decides which approach offers the best return within your site’s operating limits. It reacts to grid signals, electricity prices and the site's own demand, switching priorities by the half-hour.
Peak shaving in action
Let's say a factory normally draws around 210 kW from the grid while production is running. It has an agreed Maximum Import Capacity of 250 kVA (roughly equivalent to 250 kW). Most of the time, that is enough.
The problem comes when other loads overlap with production. At 9am, compressed air, chilled water pumps and a batch process all start within the same half-hour. The site's demand rises to 275 kW for a short period.
The software chooses peak shaving. The battery discharges 25 kW, so the site draws about 250 kW from the grid. Production carries on as normal, and the site avoids going over its agreed import limit.
Demand response in action
By the afternoon, the site is back to a steadier 200 kW import.
NESO, the National Energy System Operator that runs the GB electricity grid, calls a Demand Flexibility Service event from 4pm to 5pm. The Demand Flexibility Service is a programme that pays sites to change electricity use when the grid needs help.
The factory takes part through its supplier or flexibility provider.
The battery has enough charge available, so the software holds it for the event. During the event, the battery discharges 100 kW for one hour. The factory keeps running, but grid import falls from its expected 200 kW to about 100 kW.
Your supplier/aggregator compares the reduction to a baseline, or what you would have otherwise used during the event. They build the baseline from half-hourly meter readings. If the reduction meets the scheme's rules, they pay the factory.
The same battery does both jobs. What changes is the reason for acting. On a calm day for the grid, its goal is to lower the factory's bill by covering its own busy moments. When the grid calls an event, it steps in to help and, by doing that, it brings income into the business.
Setting up demand response on your site with GridVolt
First, get in touch with us. Then, we gather this data from your site for our DSR assessment:
| What you need | What it shows… | |
|---|---|---|
| Energy use | Half-hourly meter data, current tariff, export rates, operating schedule, flexible and non-flexible loads | When the site uses power, when peaks happen, which loads can shift or reduce, which loads must keep running |
| Battery and equipment | Battery power rating, inverter details, solar generation profile, current battery settings, battery management settings | How much power the battery can deliver, how quickly the battery can start charging and discharging, how the battery currently works with the rest of the site |
| Site constraints | Backup reserve, import and export limits, battery warranty rules, comfort levels, product temperature, production needs | Which limits the system must respect, which loads or settings must be protected, whether flexibility can be used without disrupting operations |
Note: Inverter details show how quickly and how much power can move between the battery, site and grid. Battery management settings show how the battery is currently controlled and protected..
Energy Manager is GridVolt's site-level control layer. It runs through a local gateway on your site and:
- Monitors whole-site consumption: the total power your site uses across all equipment
- Handles battery scheduling: when the battery charges, holds and discharges
- Runs load management: timing flexible loads to avoid extra cost or grid pressure
It works with your existing battery setup. Forecasts run 48 hours ahead, updated 96 times a day, with the system replanning its behaviour every 15 minutes.
For GB sites, GridTrade adds a wholesale market revenue layer. It looks for moments when spare battery capacity may be worth more in the market than it is on site. When that happens, and your site limits are protected, GridTrade can use the battery to earn market-linked revenue.
The same battery can still reduce your bill through better timing, off-peak charging and on-site use. P415, a recent GB market rule change, helps open this route for eligible behind-the-meter batteries.
Click here to contact us to tell us about your site and we'll show you what's possible.