Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line. Bringing More Businesses into Demand Response Mike Edgar Contracts Services Manager

2 National Grid is very much the “Residual Balancer” National Grid’s Energy Balancing role in the GB electricity market Electricity Energy Market Year(s) Ahead Month Ahead Day Ahead Within Day Gate Closure Demand Response little used (currently) by wholesale electricity market except perhaps at times of winter peak demand – TRIAD Avoidance Significant potential for its use is there however National Grid’s use of Demand Response is well developed but National Grid’s role is small in volume terms compared with remainder of the market National Grid Delivered Actions Market Delivered Actions Construct New Power Stations / Interconnectors Mothball / Return to Service Decisions Maintenance Outages Schedule Plant to generate Schedule Reserves Residual Balancing Ofgem Analysis of Domestic Electricity Bills – May 2012

National Grid’s Role in DSR Residual Balancer...our primary role Innovation and development activities Supporting DECC with EMR 3

DSR Supply Chain Value 4 As volumes grow Supplier imbalance may become an issue

An Opportunity for Businesses Business & I&C represent ~ 2 /3 of national demand Earn revenue to offset and reduce overall energy spend Positive messaging on corporate responsibility – supporting reduction in carbon Challenge on Energy Industry and National Grid to open up these opportunities 5

Power Responsive Launch: Output Education and engagement Simplification of information Clarity of value proposition More promotion of opportunities Greater understanding of schemes Customer led products Clear packages for customers Examine product specification Longer term product opportunities Flexibility of product design Certainty and stability Investigate longer term incentives Address longevity problem Elimination of uncertainties Coordinated approach Use collaborative pilots Customer focussed forums Collectively agreed targets for DSR

8 Questions