EVALUATION

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AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF E.6 Flexible Demand Demonstrating the Functionality of Automated Demand Response (ADR) Project Title Demonstrating the Functionality of Automated Demand Response (ADR) Tier 1 DNO SSEPD Status Closed LCNF project funding £260,000 Project objectives • Furnish all data required for a DNO to quantify the benefits of the Automatic Demand Response (ADR) system; • Drive rapid enrolment by providing required hardware, software, consulting and training to the participating building owners enrolled on the programme; • Demonstrate interoperability of systems and by adhering to the standards and open protocols, ensuring long term lifecycle of assets; • Demonstrate compliance to various elements pertaining to cyber security; Assessment Criteria Accelerates the development of a low carbon energy sector Score Overview of assessment, sources of evidence and comments (1-5) 4 Assessment: The project clearly facilitates the connection of low carbon generation or demand. The carbon benefits not specifically quantified Evidence: No carbon savings quantified from the project, some discussion of CO2 impact for the ADR sites. Carbon savings might come from two routes: • Reduction of electricity demand at the ADR sites, assuming that demand shifted is not replaced by higher demand at a different time of day • That peak demand will probably coincide with the operation of higher carbon generation (e.g. open cycle GT). So less carbon by virtue of a changed generation mix Neither of the above are discussed or quantified in the close-out report References: • Close down report PÖYRY MANAGEMENT CONSULTING October 2016 713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx 282
AN INDEPENDENT <strong>EVALUATION</strong> OF THE LCNF Has the potential to deliver net financial benefits to future and/or existing customers Has a Direct Impact on the operation of a DNO’s Distribution System - Assessment: Compelling evidence that the project is highly likely to deliver significant financial benefits in the long term (ED2 and beyond) to the majority of customers Evidence: No additional financial incentive for customers in the trial, other than reduction in consumption and possibly max demand or TUoS charges. The direct benefit to the ADR customer does not seem to have been calculated. Cost benefit varies widely between winter and summer demand reduction, summer offers bigger demand reduction (probably due to chiller loads). “It is estimated that the net present value of ADR is between £56,700 and £97,000 per building over 30 years.” Benefit is peak network demand reduction – it is clear that ADR is cheaper than reinforcement. Fixed costs mean that larger buildings need to be targeted. So potential for net financial benefits is shown – based on a small sample – but if sufficient sites were done to avoid a system upgrade then all that DNO’s consumers would benefit. References: • Close down report, October 2012 4 Assessment: The project has been /is ready to roll out into BAU. The project has a high likelihood of being replicated by other DNOs. Evidence: The ADR system is a commercial product from Honeywell. The Tier 1 project has provided some practical insight into how to engage customers, the type of customer needed, the cost and time to recruit customers etc. It also established aspects of technical functionality (performance of Honeywell's equipment in dropping the customer's demand), overcoming IT issues (firewall management) and the legal process (use of relevant standard clauses and recognition of risk allocation) which enabled the NTVV project to progress with the roll out of 30 demand response installations. This is not a complex solution – so roll-out has few barriers. References: • Close down report • SSE Questionnaire response PÖYRY MANAGEMENT CONSULTING October 2016 713_Poyry_Report_Evaluation_of_the_LCNF_FINAL_Oct_2016_v700.docx 283
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EVALUATION

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