Commercial framework for demand response services
To extend the benefits of C2C to all DNO customers, we developed new commercial templates to provide post-fault demand side response for new and existing demand and/or generation customers. The development of these new arrangements was supported by the substantial customer engagement exercise described above.
The survey provided a significant insight into an I&C customer’s appetite for C2C and is detailed in the customer segmentation report that was published on our website in June 2012.
Having completed this detailed engagement exercise with trial area I&C customers, the new contracts were brought to market and tested with new connection and existing customers. These contracts are proven modifications to existing industry framework contracts and are intended to offer significant benefits for customers over traditional demand side response formats by being less intrusive and provided at lower cost. These agreements were published on our website in December 2012.
These commercial templates were successfully applied to the 20 participants who signed up during the trial. For the ten new connections customers, the total customer contributions for a traditional solution would have been £7.84m compared £0.37m for a C2C contract – a saving of £7.47m for customers from avoiding the associated reinforcement costs. The customer types covered demand and generation managed contracts and ranged in capacity from 500kVA to 10,500kVA.
To achieve our target of 20 participants we trialled three routes to market:
Use of an agent or aggregator utilising a finder’s fee but using the DNO technology infrastructure and contract forms. Final contracts were bilateral between Electricity North West and the customer
Via an aggregator using their technology infrastructure and contract forms.
DNO direct engagement was clearly the most effective route to market offering a significantly higher sign-up rate and lower contract cost. In addition, customers valued the strong ongoing relationship with the DNO which reinforced confidence in C2C.