Just over 800MW of capacity has been secured under the first Transitional Arrangements auction, a mechanism aimed at encouraging greater take-up of demand side response (DSR) services.

The auction, which supports the Capacity Market auction, is run by National Grid and offers targeted support to DSR to “encourage enterprise and increase levels of participation” before full Capacity Market delivery in 2018/19.

The transitional auction secured 803MW electricity capacity for winter 2016-2017 at a clearing price of £27.50/KW, a higher figure than had been expected in the market.

The Government hopes that these transitional auctions will also provide valuable experience about the bidding process to help providers get in a better position to take part in the main Capacity Market auctions.

‘Strong platform’

SmartestEnergy successfully took part in the auction after announcing the launch of a new DSR service for customers last year.

Robert Owens, Vice President – DSM for SmartestEnergy said: “We have seen growing interest in DSR among our customers given the potential financial gains from taking part - even if not called on to respond - as well as other benefits from playing an active role in helping support the grid and avoid blackouts.

“Having successfully participated in this transitional auction ourselves after launching our own SmartDSR service towards the end of last year, we will now be working with our customers to help them make the most of the opportunity.

“The outcome of the first of these auctions has provided a strong platform for DSR to achieve its full potential in benefitting businesses and helping meet the UK’s future energy needs.

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