February 2015

Eunomia Supports UK’s First Electricity Demand Reduction Auction

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Eunomia has played a key role in an innovative and highly competitive auction process designed to support peak energy demand reduction (EDR) measures in the UK.

DECC has announced the winners of the first ever auction to reduce demand for electricity at peak times. A total of £1.28 million has been awarded to 18 lead organisations with 22 individual projects across Great Britain. As part of the auction process, 5.6 MW of winter peak savings have been purchased at a weighted average price of £229/kW.

The successful participants applied to be part of the auction in Autumn 2014, bidding to provide electricity demand savings during the winter peak period (1 Nov 2015 – 29 Feb 2016) in return for capital grant funding on a £/kW basis. Cutting demand on the UK electricity system during peak periods should displace expensive peak generation capacity.

Together with our partners, Verco, Eunomia’s role so far has been to assess the Measurement and Verification plans submitted by applicants. We will continue to provide technical support on the EDR as projects move forward, verifying that equipment has been installed and peak savings have been realised. We will also use our unique insights into the operation of the EDR to provide feedback to DECC that will be used to inform the future design of the EDR Pilot as part of the wider evaluation programme.

The EDR Pilot aims to establish whether capacity savings from the installation of more efficient electrical equipment could form part of the Capacity Market and to inform Government and stakeholders how EDR schemes might be made to work.

Eunomia Head of Energy Adam Baddeley said:

“The EDR Pilot is a ground-breaking scheme that we are very proud to be part of. The announcement of the auction results demonstrates that EDR payments can support projects that reduce demand on the UK electricity system in a cost effective way. It also reflects the key role we have played in providing technical support to DECC during the first phase of this auction process.”

Energy and Climate Change Secretary, Ed Davey, said:

 “We want to see if reducing demand on the electricity grid can be a cost-effective solution that will work alongside building new power stations – guaranteeing our energy security, cutting emissions and lowering energy bills.

“This auction is the first of its kind in Britain. If this goes well, demand reduction could compete alongside new generation in future capacity auctions, to help keep costs to consumers as low as possible.”

Further information on the EDR including DECC’s press notice on the EDR auction is available here.