Demand Flexibility Service 2023 (and beyond!)

matt_drummer

mmmmikey said:

It seems to me that even without the in day adjustment this scheme is open to gaming and as such somewhat ill-conceived,

It is not ill conceived if it achieved its objective.

If the costs of paying energy companies to administer the scheme are less than the costs of not doing it then it is a success and has achieved its objective. Just because the energy companies and some consumers did well out of it financially doesn't make it ill conceived.

I suspect that the savings events would be less popular if the potential reward amounted to mere pence.

I am not saying that I wouldn't take part but I think a lot of people would be less inclined to engage with it without the high rewards.

matt_drummer

mmmmikey said:

I suppose that, putting that gripe aside, there is some merit in encouraging people to understand that they can benefit by shifting demand - whether that is done by fair means or foul.

Consuming electricity at different times of the day is not a crime.

What do you mean by `foul' means?

mmmmikey

matt_drummer said:

mmmmikey said:

It seems to me that even without the in day adjustment this scheme is open to gaming and as such somewhat ill-conceived,

It is not ill conceived if it achieved its objective.

If the costs of paying energy companies to administer the scheme are less than the costs of not doing it then it is a success and has achieved its objective. Just because the energy companies and some consumers did well out of it financially doesn't make it ill conceived.

I suspect that the savings events would be less popular if the potential reward amounted to mere pence.

I am not saying that I wouldn't take part but I think a lot of people would be less inclined to engage with it without the high rewards.

I must admit I hadn't thought of it that way, you make a good point.

mmmmikey

matt_drummer said:

mmmmikey said:

I suppose that, putting that gripe aside, there is some merit in encouraging people to understand that they can benefit by shifting demand - whether that is done by fair means or foul.

Consuming electricity at different times of the day is not a crime.

What do you mean by `foul' means?

It was just a (poorly chosen?) figure of speech. 

The point I was trying to make is that although the objective of the scheme (as I understand it) is to encourage people to reduce their use during peak periods on a busy day, you can get the same payments by increasing your use during peak periods on quieter days instead and this is what I meant by "foul" means (but happy to accept it wasn't the best word to use). 

I wasn't intending to say that people doing this are somehow doing something they shouldn't. In my view if the scheme is allowing it then it's fair game to do this. In fact, I took full advantage of the in day adjustment period last year myself and (without wasting anything) made just short of £200 doing so.

matt_drummer

It may be that the in day adjustment period was designed and timed to encourage use during those three hours.

One way to reduce the effect of excessive consumption during the in day adjustment period is to extend it's length.

If the IDA period was extended to 12 hours as an example that would water down the excessive use by a factor of 4.

To get a payout based on saving 20 kWh you would now have to consume 240 kWh during the IDA instead of just 60 kWh in 3 hours.

The cost of the extra consumption would outweigh the reward unless the extra was totally electricity that would have been consumed in any case. Maybe this would prevent needless electricity consumption?

I'm not sure how the IDA would be used to influence the saving in a meaningful way if it is longer.

Maybe I haven't thought it through enough?

matt_drummer

mmmmikey said:

It was just a (poorly chosen?) figure of speech. 

The point I was trying to make is that although the objective of the scheme (as I understand it) is to encourage people to reduce their use during peak periods on a busy day, you can get the same payments by increasing your use during peak periods on quieter days instead and this is what I meant by "foul" means (but happy to accept it wasn't the best word to use). 

I wasn't intending to say that people doing this are somehow doing something they shouldn't. In my view if the scheme is allowing it then it's fair game to do this. In fact, I took full advantage of the in day adjustment period last year myself and (without wasting anything) made just short of £200 doing so.

I know what you are saying, it's just the word foul suggests wrong doing.

I think it is important to remember that people played by the rules.

I don't know but I suspect that the scheme designers knew full well what would happen and that was their design.

If they had been hit with huge unexpected costs then I am sure the rules would have been changed pretty quickly.

QrizB

matt_drummer said:

I think it is important to remember that people played by the rules.

I don't know but I suspect that the scheme designers knew full well what would happen and that was their design.

The scheme was experimental.

Reports at the time were that no-one knew what the uptake would be, and I suspect last year was a "suck it and see" trial.

Changes in light of experience were almost certain.

mmmmikey

matt_drummer said:

It may be that the in day adjustment period was designed and timed to encourage use during those three hours.

One way to reduce the effect of excessive consumption during the in day adjustment period is to extend it's length.

If the IDA period was extended to 12 hours as an example that would water down the excessive use by a factor of 4.

To get a payout based on saving 20 kWh you would now have to consume 240 kWh during the IDA instead of just 60 kWh in 3 hours.

The cost of the extra consumption would outweigh the reward unless the extra was totally electricity that would have been consumed in any case. Maybe this would prevent needless electricity consumption?

I'm not sure how the IDA would be used to influence the saving in a meaningful way if it is longer.

Maybe I haven't thought it through enough?

Makes sense to me. I made my "fortune" mainly by using electric heaters instead of the log burner during the IDA period to get the whole house nice and warm, so nothing wasted. I did this occasionally anyway last winter but not to the same extent. So there was an element of time shifting use and an element of using more energy than I would have otherwise done because the DFS made it less expensive.

matt_drummer

QrizB said:

matt_drummer said:

I think it is important to remember that people played by the rules.

I don't know but I suspect that the scheme designers knew full well what would happen and that was their design.

The scheme was experimental.

Reports at the time were that no-one knew what the uptake would be, and I suspect last year was a "suck it and see" trial.

Changes in light of experience were almost certain.

I am an accountant.

I could work out very quickly what the rules would allow and so did many other people.

I'm sure they employ better accountants than me, they must have known what was possible.

I am sure it was experimental in terms of uptake but the possibilities created by their rules can't have gone unnoticed internally?

mmmmikey

From Schedule 3 of the Procurement Rules:

"Baselining is required to calculate the actual demand reduction delivered at DFS Unit level. One baseline method will be employed in the Demand Flexibility Service. The methodology outlined in BSC P376 'Utilising a Baselining Methodology to set Physical Notifications’ (methodology id: BL01), which has been previously approved by the Authority in another context, will be applied to all DFS Units without the final in day adjustment (as described in the P376 Baselining Methodology)."

I am reading this to mean that there will be no in day adjustment this time.

Also, clause 6.3.2 says:

"it has in place at all relevant times appropriate policies and/or procedures which are (insofar as may be reasonably practicable) designed to identify and promptly notify to NGESO in writing, and will so notify NGESO upon becoming aware, of any trends or patterns of behaviour across the Unit Meter Points on its Unit Meter Point Schedule which may suggest an artificial inflation of aggregate DFS Operational Baselines as described in paragraph 6.3.1"

I am reading this to mean that if it comes to light that folk are somehow doing something else to artificially increase the baseline usage then the energy supplier has to tell ESO.

So it looks like the "loopholes that allowed gaming" (for want of a better way to put it) have been closed. But maybe someone else has more information or I have misunderstood?