National Grid will be allowed to spend more money promoting and simplifying demand-side response, the regulator has said.
The company’s regulated spending and return is governed by an eight year price control period signed off by Ofgem. The regulator has reviewed National Grid’s spending plans for the period 2013-21 and found that it needs less money in some areas and more in others.
Ofgem will allow National Grid an extra £4.5m for implementing the Strategic Balancing Reserve (SBR) and Demand Side Balancing Reserve (DSBR) programmes, which are schemes to ensure sufficient capacity. Without those schemes, the capacity margin this winter would have been almost nothing.
While National Grid spent significant sums on SBR, which pays power stations to be available if needed, the demand-side response (DSR) market also gained some benefit from the DSBR service.
Based on half-hourly meter data and, unlike the capacity market, requiring little in the way of new metering equipment, DSBR offered a simple route to market. It has allowed aggregators to bring new participants into the balancing market due to its simplicity. DSR aggregators now aim to bring those businesses into other balancing schemes as the DSBR market winds up ahead of the start of the capacity mechanism.
National Grid is also spending money to increase awareness and uptake of demand response, largely through its Power Responsive platform. Much of the feedback it has received is around simplifying the market and allowing aggregators to access wholesale and balancing markets, which would enable them to access more areas in which to trade their customers’ flexibility. Grid says it aims to simplify DSR schemes.
Ofgem plans to allow the system operator an additional £2m to fund those engagement and simplification activities.
The Energyst is putting together a conference and report on demand-side response. A handful of tickets remain available for the conference, which takes place in London on 8 September. Find out more here.