The Association for Decentralised Energy (ADE) is seeking public comment for the attached Demand Side Response Code of Conduct.
While a rapidly growing market, demand side response (DSR) is not new. Long before current energy management technologies were available, utilities and large commercial and industrial consumers were working together to reduce demand at times of energy system peak demand and help balance the network.
Today’s DSR market is seeing an increasing number of new market entrants who are developing the technologies, aggregation models, and products that serve a wider number of customers.
Increased use of DSR is demonstrating the technology’s potential to increase efficiency and provide businesses with a new revenue stream. Thousands of additional UK businesses can further reduce their cost of energy using demand side technologies and approaches.
The ADE calculates that 16% of the UK’s peak electricity requirement – or 9.8GW – could be provided by businesses shifting demand away from busy periods and by making better use of on-site generation. If utilised, this could save UK energy consumers £600 million by 2020 and £2.3bn by 2035.
As energy is not their primary business, commercial and industrial sites that want to take advantage of these savings can choose to rely on DSR “Aggregators”, who specialise in coordinating or aggregating demand response from individual consumers to better deliver power system services. Aggregators have technical and policy expertise which can help sites fully capture the benefits of DSR, providing a route to market for those businesses which do not want to invest time and capital into energy specialisation.
With many energy users new to demand response, it is important they feel confident about the service they will receive from these aggregators. Trust in how aggregators communicate with, and deliver solutions to, customers is essential.
To achieve this trust, customers need to have a common set of standards by which to compare aggregators and their claims. With a growing marketplace and increasing numbers of new entrants, it is equally important that customers are able to quickly understand which providers meet those standards. The ADE DSR Code of Conduct is designed to achieve those standards and enable customers to trust the DSR Aggregator sector.
Building assurance in the market
The DSR Code of Conduct provides this assurance by creating a voluntary program where aggregators agree to work with customers in an honest and transparent manner, while providing evidence of product benefits and fair contracts.
The DSR Code of Conduct will be open to all aggregators and licensed suppliers who facilitate energy users’ participation in different energy markets, including the Capacity Market and Balancing Services.
Creating a baseline standard for sales methodology and customer service practices will ultimately serve all DSR aggregators and help market forces decide which services and technologies best fit different customers.
The Code will initially apply to commercial, industrial and public sector energy users, as the household DSR market remains embryonic. However, the principles in the Code of Conduct can be extended to apply to all consumers, allowing for expansion to the household market in future.
The code aims to deliver the following outcomes across the specific areas in the market, including:
Sales and marketing
A relationship between aggregators and customers must be initiated in a honest and technically proficient manner. Accordingly, sales materials must be accurate and sales representatives must behave with honesty and integrity.
The Code requires sales staff to be properly trained to communicate technicalities to customers and provide honest data to back up product claims. Additionally, staff must behave in a manner that does not deceive, pressure, or harass potential customers. To assure that these rules are followed, aggregators must keep records of customer communications.
These minimum requirements help ensure that sales materials and representatives enable customers to make decisions based on accurate information, thereby driving high performance throughout the industry.
Technical due diligence and site visit
Cybercrime is a significant threat to the security of the electricity grid and energy supply. The Code ensures that best practices to protect electronic data and assets are considered as systems are implemented. Similarly, protection of customer data is one of the most important aspects of a business-to-business relationship. Code Members must strictly adhere to rules and regulations relevant to the handling and protection of customer data.
Additionally, the Code sets standards to help members prevent electronic invasion or theft of data, as well as procedures to react and strengthen systems in the event of cyberattack. These standards ensure that members are able to plan ahead of, and react to, the rapidly changing needs of cybersecurity.
Equally important, the Code requires that member installations are built to ensure protection of their employees and liability coverage is provided in the unlikely event of an accident.
Proposals and contracts
The marketing period leading up to final agreement is a critical time for customers to weigh the benefits and value of proposals. Accordingly, the Code places emphasis on the development of tenders that are fair and accurate and do not deceive customers into signing up for services that they do not want or need.
The Code, therefore, requires that all relevant benefits are clearly laid out, any fees are clear and thoroughly explained and the requirements of operating within various government schemes are clearly presented to customers.
Once these data are processed, a contract must be presented that clearly states its terms and makes the customer aware of their risks, liabilities, and obligations. This ensures that aggregators and customers enter into agreements that are mutually beneficial.
Finally, Code members will provide customers with continued support after a contract has been agreed to. By providing standards for members to process, respond to and register complaints, the Code installs mechanisms to resolve disputes that arise in a timely and attentive manner. Continued adherence to the standards of the Code helps to ensure that it remains a foundational part of members’ customer business operations.
Process for developing the Code
The text for the Code of Conduct was developed through a Committee made up of aggregators, suppliers, and industrial customers and their representatives. Ofgem and BEIS attended Committee meetings as observers.
Following consultation of the Code text, the Committee will review all comments provided and update the proposed Code text as appropriate.
We recognise that just as important as the commitments set out by the Code will be its enforcement. It is vital that customers have assurance that an aggregator or supplier is meeting the Code standards when they are advertised as a member of the Code. The ADE will be developing an enforcement mechanism to provide this assurance over the coming months.
Responding to the consultation
This document provides the draft Code of Conduct, divided into its six chapters. We welcome respondents’ feedback on the requirements set out in the document, and are eager to further engage with stakeholders as we finalise the Code.
We ask that responses focus on the specific questions provided at the end of each chapter but encourage respondents to provide any additional information they feel is relevant or helpful in finalising the code.
We would ask that you provide your comments by 15 September 2017 to firstname.lastname@example.org. All responses may be published on the ADE website, unless confidentiality is specifically requested