EVALUATION

AN INDEPENDENT EVALUATION 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
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