‘Rigid’ capacity market blocks DSR

Flexitricity set to provide 206.3MW but other providers may struggle, warns founder

The rules governing the capacity market are making it difficult for demand-side response (DSR) to qualify, the founder of aggregator Flexitricty has warned.

Alistair Martin, who is also chief strategy officer at the company, told Utility Week that Flexitricty has bucked the trend, having tested and proven all of the 206.3MW it sold into the early capacity auction, held in January this year, for delivery next month. However, Martin said other DSR providers could struggle to meet the “rigid” conditions set down by government.

He said: “In the first couple of round of the capacity market we have seen some DSR drop out, and we think that’s not reflective of what can be done. We’ve shown we can do 100 per cent. Some of these drop outs are because the rules are unnecessarily difficult for flexible customers to actually get through.”

He cited strict rules around metering on sites, which have tight deadlines but take time for DSR providers to comply with, and may cause business interruption to industrial and commercial providers of DSR capacity.

Martin added: “At an institutional level – regulators, government or the top level bodies that govern how these things work – there’s a limited degree of understanding of what life is really like on an electricity customer side.”

The Early Auction for the Capacity Market for delivery in 2017/18 cleared at £6.95 per kilowatt per year in February 2017 – by far the lowest price in any of the auctions so far.

The Early Auction was dominated by existing generation, the majority of which was coal and combined-cycle gas turbine (CCGT) plant. DSR won contracts totalling just 209MW as 583MW dropped out.

BEIS declined to comment on whether all DSR that had secured contracts was set to go ahead to operate in the market, saying: “We don’t release information publicly on the register until 60 or 120 working days later depending on appeals.”