Routes to energy efficiency: complementary energy service products in the UK residential sector

A D Hawkes, G Tiravanti, and M A Leach, Imperial College London

Keywords

Energy Service Company, Demand Side Management, Residential, Time-of-use, micro-CHP

Abstract

Energy service companies represent a potential vehicle for transformation of the way the UK residential energy market operates and a windfall gain in supply-side energy efficiency. We consider two potential energy services company products that can provide economic and/or environmental benefits; grid-connected micro-Combined Heat and Power (CHP) and a time-of-use electricity tariff. We analyse each product independently, and then consider the synergies that exist between them. We draw upon a residential electricity demand model based on behavioural patterns which allows "shiftable" load to be identified, and assume that a consumer will shift load from high-priced periods to lower-priced ones. The economics of a time-of-use tariff as an independent product are thus evaluated. A cost minimisation model that chooses the best operating strategy and optimum micro-CHP electrical generation capacity to meet energy demand for the consumer is then applied to energy demand cases with and without load shifting under the time-of-use tariff. It is found that time-of-use charging and micro-CHP are weak complementary measures in an economic and environmental sense because load shifting results in only a slightly higher portion of the electricity load being met by the more efficient micro-CHP unit, resulting in a small decrease in equivalent annual cost and a small greenhouse gas emission reduction over and above that of each product independently. Both the time-of-use tariff and micro-CHP products are independently effective, offering a positive economic outcome to the investor. The synergy between the two products is small, but comes at no additional capital cost, and is therefore welcome.