Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC (Text with EEA relevance) (c. 27)

ANNEX XI U.K. Energy efficiency criteria for energy network regulation and for electricity network tariffs

1. Network tariffs shall be cost-reflective of cost-savings in networks achieved from demand-side and demand- response measures and distributed generation, including savings from lowering the cost of delivery or of network investment and a more optimal operation of the network. U.K.

2. Network regulation and tariffs shall not prevent network operators or energy retailers making available system services for demand response measures, demand management and distributed generation on organised electricity markets, in particular: U.K.

(a)

the shifting of the load from peak to off-peak times by final customers taking into account the availability of renewable energy, energy from cogeneration and distributed generation;

(b)

energy savings from demand response of distributed consumers by energy aggregators;

(c)

demand reduction from energy efficiency measures undertaken by energy service providers, including energy service companies;

(d)

the connection and dispatch of generation sources at lower voltage levels;

(e)

the connection of generation sources from closer location to the consumption; and

(f)

the storage of energy.

For the purposes of this provision the term ‘organised electricity markets’ shall include over-the-counter markets and electricity exchanges for trading energy, capacity, balancing and ancillary services in all timeframes, including forward, day-ahead and intra-day markets.

3. Network or retail tariffs may support dynamic pricing for demand response measures by final customers, such as: U.K.

(a)

time-of-use tariffs;

(b)

critical peak pricing;

(c)

real time pricing; and

(d)

peak time rebates.