Commercial arrangements study: a review of existing commercial arrangements and emerging practice
This report was produced by consultants Element Energy and commissioned to feed into the Customer-Led Network Revolution (CLNR) project, which is supported by Ofgem’s Low Carbon Network Fund (LCNF).
The main premise of the CLNR project is that the reinforcement of electricity distribution networks required to cope with large-scale take-up of low carbon technology can be delivered most cost-effectively and efficiently by using a combination of new network technologies and flexible customer response from both demand and generation. While many of the technical solutions exist, they have not been deployed at scale at the distribution level in an electricity market with the degree of vertical separation as that operating in Great Britain.
This report provides a detailed assessment of the legislative framework and commercial arrangements currently operating in the GB electricity market in order to understand what barriers existing arrangements pose both to the deployment of network management and demand response technologies and also to innovative commercial offerings, such as time of use tariffs and load control incentives.