Demand Turn-Up has been “killed before it got going”, an industry member told New Power after the results of National Grid’s fixed tender for the service were announced.
In the tender, 138.6MW of fixed volume was accepted from tenders totalling 262.2MW. But that meant the system operator (SO) had procured just half the volume it had announced. The SO has to balance the cost of calling on demand turn-up against that of other actions, such as constraining wind power, which may be cheaper.
New Power was told that the SO should have been ready to let the price rise in this round to “get the industry off the ground” and enable potential bidders to “get the capability in place”. Procuring half what it expected sent a bad signal to potential market members. Installing the necessary metering and controls is costly, and for some bidders there are other costs. For example, CHP plants may have to find another, probably less-efficient, source of heat and that is likely to raise costs when turn-up is called upon.

The SO was applauded, however, for some aspects of the launch, including allowing different types of response to compete – and  publicising the option widely.
Views were mixed on whether the companies would find the next procurement phase, which is more flexible, more atractive

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