Gas consumers are being given the unique opportunity to trial an innovative product with the potential to provide greater gas security. Sarah Arnold, a Senior Commercial Developer at National Grid, explains how a new product, called Gas Demand Side Response (DSR), could help to enhance security of supply in a gas emergency.
“The DSR product would encourage large gas consumers to enter an agreement to offer to reduce their gas demand in times of system stress.”
Sarah Arnold, Senior Commercial Developer, National Grid.
The trial will run from July 13-21 and there is also the potential to re-open the trial for a second phase that would run between July 27-29.
Source: National Grid.
In Great Britain the gas market has always provided secure supplies and is likely to remain resilient in all but the most extreme circumstances. Despite this fact, changing UK supply and demand patterns and tighter energy margins mean that having robust contingency plans and a variety of commercial tools in place has never been more important.
To help develop these commercial tools the gas industry has been having ongoing discussions about the development and introduction of Gas Demand Side Response. Put simply, DSR is when consumers offer to enter an agreement to reduce their demand, during the build up to a gas emergency, in return for payment. We believe that this could be a useful addition to the methods we already use to ensure security of supply – and we’re about to launch a trial to test it.
A key part of developing DSR has been ensuring the right commercial incentives are in place to encourage large gas consumers to voluntarily reduce their demand ahead of a system emergency.
As well as the financial benefits created by reducing the likelihood, severity and duration of a system emergency, National Grid will pay an agreed DSR offer price if the service is ever used in the build up to, or within a gas emergency.
Innovative and intelligent
By providing DSR, large consumers could protect their critical loads by turning down other, less critical ones. It’s an innovative and intelligent way of helping to provide greater supply security.
Gas consumers can choose to do this in a way that best suits the needs of their business. So they could offer different volumes of gas within certain days, or on a series of days. Essentially, the product gives each consumer the flexibility to tailor their agreement to their specific business processes.
These reductions in consumption would give National Grid access to additional volumes of gas in the build up to an emergency, that could be used to help balance the network. In turn, consumers would also benefit as it has the potential to minimise the cost of demand interruptions and further reduce the chance of entering into, or increasing the severity of an emergency.
Join the trial
The trial is the first step towards the potential implementation of the DSR product. It will aim to provide participants with a greater awareness of the DSR mechanism and allows us to understand the level of interest in the product. We’ll also better understand what sort of DSR volume participants would be able to offer which is helpful in assessing the benefits of DSR. We’ll then use the feedback and learning gained from the trial to make any necessary changes to the methodology.
The trial will run from July 13-21. Large gas consumers (consumers who have an annual quantity greater than two million therms) who are interested in taking part are invited to register during this window. They will need to submit their DSR offer forms, including the volume of gas that they could offer and the price they would offer it at. There is also the potential to re-open the trial for a second phase that would run between July 27-29. This second phase would involve National Grid providing a mock Gas Deficit warning scenario and asking participants if they wanted to change their offers based on the new market intelligence.
Find out more
If you are interested in taking part in the trial, or just want to be kept up to date with the latest trial information, you can join the DSR mailing list below.
Alternatively if you wish to individually discuss the trial process you can contact us at Box.DSRDevelopment@nationalgrid.com and provide a name and telephone number for a call back.