?>

Demand-side response capacity auction clears at £45/kW

money

The capacity market auction specifically for turn down demand-side response has cleared between £45 and £50/kW, according to the EMR delivery body. The exact clearing price will be published at 7pm. Updated: Clearing price is £45/kW/yr.

The result is around double that anticipated by some market participants, and much higher than last year’s Transitional Auction, which cleared at £27.50/kW. Smartest Energy, which was vying for around 100MW of contracts, suggested it would clear at around £25/kW.

Screen Shot 2017-03-22 at 16.25.13

National Grid aimed to procure around 300MW, but had leeway to procure up to 500MW if the price fell significantly.

Given that only 373MW of turn down DSR was bidding for contracts, the outturn is perhaps unsurprising. It does, however, provide an indication of the volume of turn down DSR in the market, which had previously been an unknown quantity. According to Energyst Media’s end user surveys, the vast majority of demand-side response comes from generation technologies.

Today’s auction was the last set aside purely for turn down DSR. The now defunct Energy and Climate Change Committee urged the government to create policy that favours turn down demand side response over decentralised diesel generation in its final report. Such an approach, via a mooted merit order, would be more environmentally friendly. But it would significantly reduce the current DSR market that is able to contribute to security of supply.

Regulator Ofgem has recently issued proposals that would make engine farms less competitive in the capacity market, but other market participants, such as Flexitricity founder Alastair Martin, believe there is a simpler fix for a market that has failed to deliver a single large scale new build combined cycle gas turbine.

Update: 19:00 22/03/17: headline updated to reflect actual clearing price.

Related stories:

Free demand-side response report

Smartest Energy: TA to clear at £25/kW, more support needed for DSR

Energy minister: TA capacity auction can procure up to 500MW

Capacity market ‘will continue to incentivise engine farms without simple fix’

National Grid buys 139MW of demand turn up to balance grid in summer

Capacity market clears at £6.95/kW

Grid procures 803MW of extra power in first transitional capacity auction

Scottish Power asks Ofgem to change classification of batteries in capacity market

Gateshead Council signs £1m demand response contract with Flexitricity

Capacity market too low for new gas but gigawatts of DSR, storage and CHP win contracts

Capacity breach: Public leisure facilities face closure due to energy policy costs

Firms ill prepared for ‘huge’ impact of capacity charge on bills

National Grid issues first capacity market notice

Energy suppliers step up DSR aggregation efforts

Flexitricity launches footroom service

Flexitricity warns demand response cannot be rushed as winter looms

National Grid mulls rolling all frequency balancing services into one scheme

Click here to see if you qualify for a free subscription to the print edition of The Energyst, or to renew.

Follow us at @EnergystMedia. For regular bulletins, sign up for the free newsletter.

Days to DSR

0Months0Days0Hours

Headline Partner:

Supporting Partners:

Media Partner

]

CPD certified event

tweet