February 2016

Eunomia Supports UK’s Second Electricity Demand Reduction Auction

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Eunomia continues to play a key role in the Government’s innovative and competitive auction process designed to support peak electricity demand reduction (EDR) measures in the UK. The EDR Pilot aims to determine the most effective design for a scheme which delivers savings from the installation of more efficient electrical equipment.

DECC has announced the winners of the second auction to reduce demand for electricity at peak times. A total of £4.74 million has been awarded to 24 lead organisations with 37 individual projects across Great Britain. As part of the auction process, 23.3 MW of winter peak savings have been purchased at a weighted average price of £203/kW.

The successful participants applied to be part of the auction in Autumn 2015, bidding to provide electricity demand savings during the winter peak period (1 Nov – 28 Feb) in return for capital grant funding on a £/kW basis. The pilot is testing whether EDR projects could help reduce stress and load on the grid system during the winter peak period. This is part of testing if EDR could one day participate in the Capacity Market, which exists to ensure security of supply.

Eunomia’s role has been to assess the Measurement and Verification plans submitted by applicants. In addition, we have been assessing installation and operational verification evidence for applicants that were successful in the first auction in 2014 and are now installing the agreed measures. We have also undertaken a site inspection programme that is being used to monitor the compliance of projects and eligibility for payments through physical checks of equipment.

We will continue to provide technical support on the EDR Pilot as projects move forward. This includes verifying that equipment has been installed and peak savings have been realised. We will also use our unique insights into the operation of the scheme to provide feedback that will be used to inform a related ongoing policy evaluation.

Eunomia Head of Energy Adam Baddeley said:

“The second auction for the EDR Pilot demonstrates that there is an opportunity for Government to deliver cost-effective emissions reductions via support for electrical efficiency across a range of organisations. We are proud of the key role we continue to play in providing support to DECC during this second phase of the EDR Pilot.”

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