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National Grid Cancel Demand Side Balancing Reserve 2016/17: Inenco Response

22nd August 2016

National Grid cancel Demand Side Balancing Reserve 2016/17: Inenco response

National Grid has made a surprise decision to withdraw Demand Side Balancing Reserve (DSBR) for the coming winter, stating that they have not received enough capacity across the peak demand period. We also know that in previous years, it has cost more to procure business capacity than the supplementary balancing reserve provided by diesel generators and other fast responding generators.

In response to this decision, Inenco’s chief commercial officer David Cockshott said:

“The decision to cancel Demand Side Balancing Reserve for the coming winter is a short-sighted move by National Grid.

It is already widely acknowledged that businesses will have a crucial role to play in keeping the system balanced in the future, providing cost effective flexibility. Withdrawing a scheme three months before it comes into effect risks undermining business confidence in future schemes, from the capacity market to frequency response.

The UK will now be reliant on carbon intensive generators to keep the system balanced over the coming winter. This could be an indication that Government is prioritising short term cost over carbon reduction, a move that seems at odds with the Paris Climate Agreement and the recently ratified carbon budget.

Businesses urgently need certainty from Government – recent research by Inenco indicated that 80% of businesses want BEIS to prioritise a long term policy framework setting out its energy strategy. Today’s decision to withdraw DSBR at short notice is yet another example of how businesses are impacted by changing priorities and policies.”

We have spoken to National Grid’s Power Responsive team today who have confirmed that National Grid continues to be committed to facilitating the growth of demand side solutions and encourages this growth and innovation via Power Responsive.