Smoothing peaks and troughs: intermediary practices to promote demand side response in smart grids

This paper investigates the development of Demand Side Response (DSR) in the context of smart grid initiatives on regional distribution networks in the UK. DSR is an emerging approach to augment asset management in the electricity sector, where network capacity is acquired from demand side actors (e.g. major commercial customers) who reduce their electricity demand at peak times by using their own generators or by shifting electricity consumption outside peak periods. DSR has a very different institutional arrangement compared to conventional network reinforcement for peak demand, since capacity is acquired via commercial and contractual arrangements rather than ownership and property rights. Thus, we cast DSR as an institutional innovation and identify important actors in such developments. Key among these are ‘aggregators’ who are companies that aggregate the DSR capacity from a number of commercial customers to provide capacity for the Distribution Network Operator (DNO.) Exploratory case study research was conducted by the authors as part of a smart grid initiative, with a particular focus on the work of aggregators. Our findings identify aggregators as intermediary agents situated between utility firms and customers with DSR capacity and brokering relationships between them. Aggregators create receptivity for DSR by identifying potential adopters of DSR (e.g. distribution network operators and electricity network customers) and construct persuasive and pervasive propositions that renders DSR a valid energy management initiative that accords with an organisation’s business priorities and institutional arrangements. It is through this process that aggregators are important actors who facilitate and create a tighter fit between DSR and the contexts in which it is deployed. Thus, this paper provides insights on the work of aggregators in DSR developments and identifies them as potentially important actors in smart grid futures.