Smart Grids: A New Incentive for SME Carbon Reduction

Collectively small and medium sized enterprises (SMEs) are significant energy users although many are unregulated by existing policies due to their low carbon emissions. Carbon reduction is not a priority for many SMEs but smart grids may create a new opportunity. A future smart electricity grid will give suppliers a clearer picture of energy flows to consumers in real-time and the opportunity for consumers to engage in demand side management, through pricing incentives. Smart grids can ease the challenge of matching electricity supply and demand throughout the coming decade as the proportion of renewable electricity increases and existing coal and nuclear power stations close. Managing unregulated electricity consumption will become more important as more renewable electricity is generated. As well as incentivising local carbon reduction, engaging SMEs with smart grids has potential for contributing to wider grid decarbonisation. Modelling of buildings, business activities and technology solutions is needed to identify opportunities for carbon reduction. The diversity of the SME sector complicates strategy development. SMEs are active in almost every business area and occupy the full range of property types. This paper reviews previous modelling work, exposing valuable data on floor space and energy consumption associated with different business activities. Limitations are seen with the age of this data and an inability to distinguish SME energy use. By modelling SME energy use, electrical loads are identified which could be load-shifted on demand, in a smart network. Initial analysis of consumption, not constrained by existing policies, identifies opportunities for future smart grid research. These include heating and cooling in retail and commercial offices. Hot water in hotel and catering and retail sectors may also be significant because of the energy storage potential. Areas to consider for energy efficiency schemes are also indicated.