28 January 2016, London
. KiWi Power, the UKs largest demand response aggregator and energy innovator have today commented on the results of the Transitional Arrangement.
The Transitional Arrangement (TA) auction, which supports the Capacity Market auction, is run by National Grid and is one of the interim tools in place to manage future electricity supply. It offers targeted support to Demand Side Response (DSR) to encourage enterprise and increase levels of participation before full Capacity Market delivery in 2018/19.
The TA auction, which completed yesterday, is widely being regarded as a success in allowing demand response providers to participate fairly in the balancing markets providing capacity in the run up to 2018/19.
The clearing price for the auction was £27.50 per kW to help secure electricity supplies next winter. Approximately 802 MW total capacity cleared in the auction with 475 MW of it from demand side response. Of the demand side response aggregators bidding for contracts, KiWi Power secured the most MW megawatts at 173.6MW.
The 2016 TA auction results represents very good value for energy security when compared with the 2015 emergency Supplemental Balancing Reserve (SBR) auction. Prices in the last SBR auction saw one 500MW tranche paid £88,000/MW. The power stations involved in the SBR auction will close over the next two years meaning consumers’ money will not be funding any future security. Another reason why the TA auction is a success – as this money will fund securing assets well into the future.
KiWi Power CEO and Co-founder Yoav Zinger said "The auction has delivered substantial volume and could deliver a lot more if another good auction is run next year and the market continues to gain confidence in demand response.”
“This is an important result for demand response in the UK as it is a demonstration that DSR has a key role to play in balancing the grid and is recognised as a greener, more efficient option than traditional power station generation. In addition, demand response can be rolled out across commercial sites in a matter of months unlike building new power stations which can take years.”
"Commercial and Industrial energy users are being sent a positive message that engaging in programmes such as demand response are not only better for our environment and will help us transform our electricity infrastructure but are also commercially viable."
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