Gas Security of Supply Significant Code Review – Demand-Side Response Tender Consultation

Publication date
23rd July 2013
Closing date
24th September 2013
Policy area

The aim of the Gas Security of Supply Significant Code Review (Gas SCR) is to reduce the likelihood, severity and duration of a gas supply emergency. We are aiming to do this by ensuring the market arrangements provide appropriate incentives on gas shippers to balance supply and demand.

Our updated proposed final decision is set out in a letter we have published alongside this document. The letter sets out our proposed reforms to the market rules that would apply if an emergency occurred. A key part of the proposed reforms is that the Authority is committed to exploring incorporating a System Operator (SO) led demand-side response (DSR) tender into the reforms. This would provide a mechanism for large consumers to reveal the true cost of interruptions to their gas supplies. These costs could then be incorporated into the imbalance price, which should ensure that the costs of balancing supply and demand is borne by those responsible for creating any imbalance. The tender should also provide a way for large consumers to contract to provide DSR services in a centralised way, thus further boosting security of supply.

This document sets out three high level approaches to designing the tender for consultation. We are keen to get stakeholder views on these approaches to the design of the tender, as well as on a range of additional design issues. The responses will help the Authority make a decision on whether and how to incorporate a SO-run DSR tender into the reforms.

Please note that the closing date of the consultation has been revised from 17 September to 24 September following stakeholder requests.