Originally Poyry provided a report to Electricity North West Ltd which gave an initial indication regarding the strength of price signal Electricity North West Ltd might be able to provide to a market where the distribution network is at risk would be strong enough to over-ride signals from Grid and suppliers. Subsequently Electricity North West Ltd approached National Grid to participate in a joint study looking at the uses and interaction of DSR (Demand Side Response) in general.

The analysis requires the definition of drivers by stakeholders and scenario analysis in order to be able to begin to quantify the total value of the different ways in which Demand Side Management (DSM) can be used by different parties. Understanding the drivers and scenarios will allow beginning to see when uses of DSR by different stakeholders may be in conflict and when they might be aligned. This is in turn allows to investigate the value to different parties of DSR in particular circumstances and hence the way in which it may be used. This will ultimately feed into the analysis of commercial arrangements that need to be struck between parties.

There are five key dimensions of understanding the uses of DSR:

• Magnitude: How much DSR will be needed in MW terms

• Duration: How long will the DSR need to be used for, minutes, hours etc.

• Timing: When will DSR be dispatched, time of year, time of day etc and what is the frequency associate with this and how often within season, within week

• Notice period: Over what period of time will DSR be utilised and how far in advance will this be known i.e minutes, hours, days etc.

• Location: When will the use of DSR need to consider locations i.e. where and at what level of the T&D network will DSR be used and how localised will this be.

Objectives

To develop an understanding of when the stakeholders of DSM (TSO, DNO and supplier) are in tandem or in conflict and to present an initial quantification of the value associated with various uses of DSM.

A detailed quantitative assessment can take place as an extension of this study if it is deemed useful in light of this initial work.