Ofgem approves demand response scheme
23 Dec 2013
The energy regulator Ofgem has approved National Grid’s plans to introduce a demand side scheme to encourage major users of electricity to reduce usage at peak times.
National Grid’s Demand Side Balancing Reserve (DSBR) scheme will run between 4pm and 8pm every night during two winter periods: November 2014 to February 2015, and November 2015 to February 2016.
This scheme will be open to any plants with half-hourly meters, and the only technology required will be a mobile phone to receive text message notifications of when National Grid want operators to turn down their electricity consumption from the grid.
Ofgem will only allow National Grid to pass on any costs provided they are incurred in an efficient and economic manner
Ofgem statement
Payments on this scheme will be made on a pay-as-you-go basis, National Grid proposing capacity payment fees ranging between £1,000 per MWh and £15,000 per MWh.
An Ofgem statement issued on Thursday said: “Ofgem’s decision today means that National Grid can make preparations to be able to begin tendering for the services from Spring 2014, so that they could be delivered from winter 2014-2015 onwards.
“National Grid’s revenue for these new tools will be regulated by Ofgem. Ofgem will only allow National Grid to pass on any costs provided they are incurred in an efficient and economic manner. National Grid would need to demonstrate this at every stage of the process, from deciding how much to procure, the procurement process itself, and decisions on if and when it uses the products. National Grid estimates that the impact of the services on consumer bills would be less than £1 per year for households.”
Confirmation of the DSBR scheme followed the news that the Energy Act had been passed, paving the way for another demand side response scheme to replace DSBR at the end of 2016.
