Rudd’s reset overlooks DSR, warns Greatrex

The energy policy ‘reset’ delivered by energy secretary Amber Rudd last week has intentionally overlooked demand-side response (DSR) after a media backlash against National Grid’s supply security plans, according to former shadow energy minister Tom Greatrex.

In an exclusive column for Utility Week Greatrex said that Rudd had “downgraded” DSR within the plans after the national media reacted with concern when National Grid used its DSR contracts to secure supply for the first time earlier this month.

“Little matter that the intervention worked as intended, and the lights stayed on, the resulting headlines will not have encouraged boldness and long term thinking in Whitehall,” Greatrex said.

As a result the wide-ranging reset speech was more a “restatement” of existing Conservative party in support of gas-fired power, shale development and new nuclear, Greatrex said.

“Despite the efforts at spinning as something more substantial, what we eventually got was mostly a re-statement of existing policy,” Greatrex said.

But Greatrex said that even here the reset offered little detail on how the existing policies would be implemented.

“There has been no suggestion of how the capacity market will deliver investment in new gas where it has failed to date, no indication of the size of the levy control framework post 2020 and little confidence for offshore wind developers that warm words today won’t give way to similar antipathy to that directed at onshore wind in recent months,” he said.

The DSR downgrade follows a warning from Tempus Energy chief executive Sara Bell who last week slammed critics of National Grid’s DSR campaign, saying “fear tactics” over the UK’s generation capacity threaten to undermine “valuable” business opportunities.

Bell said those with vested interests in centralised energy investment are resorting to “fear tactics”, to “hold on” while the energy system shifts towards an increasingly decentralised model.

National Grid used its demand-side balancing reserve (DSBR) for the first time in early November to shave peak demand while ramping up generation to balance the system. Companies which have signed up for a DSBR contract with National Grid agree to reduce their use of grid generation during peak demand hours if the system is under stress.

But the national press criticised the move as being anti-business and a sign of an ineffective electricity system, saying National Grid “demanded” that workers “down their tools” to prevent a blackout.