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Unleashing Demand Response with Effective Supplier Compensation

Unleashing Demand Response with Effective Supplier Compensation

Full Title: Unleashing Demand Response with Effective Supplier Compensation
Author(s): Phillip Baker
Publisher(s): Regulatory Assistance Project
Publication Date: June 1, 2017
Full Text: Download Resource
Description (excerpt):

Explicit demand response, where aggregators enable small commercial and domestic consumers to participate directly in the wholesale market by flexing their demand, is a vital resource in the transition to a sustainable electricity system. However, barriers to the successful development of this vital resource exist in many Member States, including the need for aggregators to obtain permission from the customer’s supplier and to compensate the supplier for lost income.  The level of compensation is normally a matter for negotiation between aggregator and supplier, although France has an administered arrangement that removes the need for negotiation. In some Member States (e.g., Great Britain), no compensation is required.

Article 17 of the proposed Electricity Directive harmonises the situation across Europe, ending the requirement for an aggregator to obtain permission to operate on the consumer’s demand or to compensate the consumer’s supplier (other than in some imbalance-related “exceptional circumstances”). In its current form, Article 17 removes a significant barrier to the development of explicit demand response and the enhanced customer market participation and flexibility so necessary to a cost-effective transition to a low carbon electricity system

All statements and/or propositions in discussion prompts are meant exclusively to stimulate discussion and do not represent the views of, its Partners, Topic Directors or Experts, nor of any individual or organization. Comments by and opinions of Expert participants are their own.

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