National Grid is talking afresh to demand side balancing reserve (DSBR) providers about how they can respond to the need for peak services this winter, after it had ‘minimal’ response to its June tender for the service to be provided over the winter 2016/17 period.
The System Operator said the DSBR mechanism was designed for organisations that do not already respond to peaking price signals by reducing or shifting demand or running embedded generation. “Despite National Grid amending the DSBR service via a consultation in September 2015 to encourage participation over the peak, it is clear this has not been successful”, the SO said.
National Grid said it remained “committed to facilitating the growth of demand side solutions that work for us and the DSR market” and it would use the Power Responsive campaign to encourage the sector to grow. It said some elements of the DSBR option had been valued by providers and that would be applied in developing future demand response options.
The decision comes as regulator Ofgem is consulting on whether the System Operator should be able to recover the costs of setting up and running the DSBR service and Supplementary Balancing Reserve, by which the SO procured additional standby generation that had been out of the market. The SO asked for £4.56 million in set up and management costs for the two services, of which the regulator plans to allow £4.5 million.