Around 312MW of turn-down demand side response (DSR) has been secured by National Grid as part of its capacity auction.
The Transitional Auction (TA), which supports the Capacity Market, cleared at £45/kW/year for delivery in 2017/18.
A total of 372.987MW entered the auction, out of which 312.171 have been awarded contracts.
Winners include UK Power Reserve, Limejump, EnerNOC UK, EDF Energy, KiWi Power, Smartest Energy and Tata Steel UK.
As part of the scheme, participants will reduce power usage, especially when demand increases during peak times – between 9am to 11am or 4pm and 8pm.
The Association for Decentralised Energy (ADE) estimates businesses will earn just above £14 million in revenue, helping them to manage their energy costs and boost their competitiveness “simply by turning down or shifting non-critical processes”.
Demand turn down includes temporarily switching off unnecessary lighting, pumps and motors, while demand shifting is the practice of moving a business process to earlier or later in the day.
The ADE adds there is nearly 10GW of untapped business led demand response, including highly efficient combined heat and power (CHP).
SmartestEnergy says the clearing price is “far higher” than what it predicted.
Robert Owens, VP Asset Optimisation adds: “With such a high price now set from the TA auction, we do have concerns that DSR will struggle to compete alongside existing and peaking generators in the next auction and are concerned that a significant drop in price may mean we lost momentum.
“We would like to see confirmation from National Grid that support will be provided to help DSR gather more momentum and make a significant contribution to the UK’s energy mix.”
The results will have to be approved by the Secretary of State before contracts are signed.