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Ofgem ’ s Gas SCR – Background on the DSR mechanism

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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Ofgem ’ s Gas SCR – Background on the DSR mechanism

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  1. Ofgem’s Gas SCR – Background on the DSR mechanism Stephen Jarvis 02/07/14

  2. 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

  3. 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

  4. The DSR licence condition principles (1-4)

  5. The DSR licence condition principles (5-8)

  6. 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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