SmartGrid GB warns on demand side response in Britain


London, U.K. — (METERING.COM) — August 26, 2013 – SmartGrid GB has expressed concern for the future demand side response industry in Britain, saying that it is at risk of damage from the pace of development of the proposed capacity market.

In particular, given the proposed timetable to complete the design of the capacity market this year, if this new market fails in respect of demand side response it will be harder for it to attract policy commitment or investment in the future.

In a new report which was written with the assistance of international law firm Bird & Bird, SmartGrid GB supports the introduction of a capacity market, saying it is one of the most pertinent aspects of the recently introduced Energy Bill for the future of the smart grid industry.

The need for this capacity market is dictated by the anticipated closure of around a fifth of existing generating capacity due to reach end of life by the end of this decade, an increasing reliance on less flexible and more intermittent generation, and a likely rise in electricity demand.

SmartGrid GB makes five core recommendations:

  • Long term investment in demand side response is likely to benefit from a delay in the production of the design for these aspects of the capacity market (as against the government’s proposed timetable).
  • Demand side response should not be seen as monolithic and there is a strong case for offering a variety of product arrangements within the capacity market mechanism.
  • Demand side response should be granted a level playing field free from a one-size-fits-all approach that may favour one type of capacity.
  • The capacity market should have the ambition of opening up new sources of capacity, and innovative new markets, rather than relying predominantly on existing players and mechanisms.
  • A national energy vision and strategy, supported at Cabinet level, is needed to provide a clearer direction of travel, reduce investment uncertainty for industry and ensure all aspects of energy policy are coordinated.