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Ofgem ’ s Gas SCR – Background on the DSR mechanism

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Ofgem ’ s Gas SCR – Background on the DSR mechanism. Stephen Jarvis 02/07/14. Gas SCR statutory consultation. On June 16 th 2014 we published our statutory consultation on the Gas SCR: confirmed our final policy decision on cash-out reform as set out in Feb 2014

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Presentation Transcript
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Gas SCR statutory consultation

  • On June 16th 2014 we published our statutory consultation on the Gas SCR:
    • confirmed our final policy decision on cash-out reform as set out in Feb 2014
    • confirmed the decision to proceed with developing a DSR mechanism
    • set out code changes and shipper, supplier, and transporter licence modifications
    • consultation closes 16th July 2014
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Rationale for DSR

  • The rationale for proceeding with the development of a DSR mechanism:
    • there are significant benefits to be had from consumers reducing their demand voluntarily ahead of an emergency in a coordinated and efficient manner
    • throughout the SCR process, some stakeholders have expressed doubts that such voluntary interruption would emerge of its own accord
    • a number of stakeholders suggested the development of a centralised mechanism for DSR, run by the system operator
    • such a mechanism could help provide a route to market for some consumers to offer DSR, and potentially kick-start commercial interruption in the longer-term
    • in deciding to proceed with this development process we have taken account of analysis we commissioned from two separate consultants, as well as extensive consultation responses and discussions at stakeholder workshops
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Timelines

  • The proposed DSR licence condition intends to place an obligation on National Grid to:
    • develop a draft DSR methodology and submit it to the Authority
    • run a trial if directed by the Authority to do so
    • submit to the Authority a report on the outcome of the trial and submit a final version of the Demand Side Response methodology
    • implement the methodology if directed to do so
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