Task 8 – Demand-Side Bidding in a Competitive Electricity Market

Synopsis

Task 8 evaluated and promoted Demand Side Bidding (DSB) as a means of improving the efficiency of the operation of the electricity supply chain. The characteristics, strengths and weaknesses of existing DSB schemes and creating guidelines for the development and enhancement of new schemes was fulfilled.

DSB is a mechanism that enables the demand side of the electricity market to participate in energy trading. More specifically, DSB allows electricity consumers to offer a specific reduction in demand, at a given time, in return for a specified income. DSB can improve the efficiency of the electricity supply chain by increasing competition in the wholesale energy market and by acting as an alternative to conventional generation. For example, DSB can be used to balance electricity supply and demand and also maintain the quality and security of supply. In addition, DSB could have important environmental and energy efficiency benefits in some situations when it is used as an alternative to conventional generation.

Achieved Results

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The results and findings of Task 8 were used to produce the report, A Practical Guide to DSB. The Guide is divided into two sections. The first provides background information about the concept of DSB and why it is important in the operation of competitive electricity markets. This includes a number of important definitions and a discussion of the drivers for DSB. The second section presents a step-by-step guide to the implementation of DSB, covering such issues as: understanding the needs of the DSB buyer; the suitability of consumers to meet these needs; the control, monitoring and communication technologies required; and how to make a business case for each participant. Each step is illustrated by worked examples. Further examples are included at the end of the Guide to provide a wide coverage of DSB applications for both Network Stability and Planned Balancing.

Participation

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Finland, Greece, Netherlands, Norway, Spain, Sweden and the United Kingdom

Task duration: April 1999 – March 2000

Contacts

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Country	Role	Name	E-mail
United Kingdom	Operating Agent	Linda Hull
Finland	National Expert	Seppo Kärkkäinen
Greece	National Expert
Netherlands	National Expert	Jan Griffioen
Norway	National Expert	Bjørn Grinden
Spain	National Expert	Carmen Rodriguez-Villagarcia
Sweden	National Expert	Margareta Bergström
United Kingdom	National Expert	Mark Bailey

Publications

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Task 8: – A Practical Guide to Demand-Side Bidding
Task 8: – Market participants’ views towards and experiences with Demand Side Bidding
Task 8: – Demand Side Bidding Brochure

Annex 8 Legal Text