The Government is now designing a pilot process to explore how to include electricity demand reduction in the capacity market that will be introduced as part of the electricity market reform process. Despite the best intention of ministers, the early signs are not good. DECC is focusing on detailed design issues and taking its eye off the big picture.
This paper recommends that there are many practical advantages for Government in appointing a delivery agent for the pilot process and introducing an incentive arrangement to ensure the pilot leads to more demand reduction during the rest of this decade.
