Notice

Alternative Energy Markets (AEM) Programme: Design, delivery, research and evaluation proposal

Published 4 June 2021

This notice was withdrawn on 25 May 2023

The Alternative Energy Markets early market engagement was superseded by the Alternative Energy Markets Innovation Programme.

Note that these activities and dates are indicative and subject to change.

AEM Programme

The Alternative Energy Markets (AEM) Programme is exploring what an alternative system of network and policy price signals might look like, whether those signals could be trialled in a real-world environment, how to undertake any potential trial, and how energy suppliers and consumers may respond within a trial.

The Department for Business, Energy and Industrial Strategy (the Department) launched the AEM Energy Price Signals Study tender on 17 March 2021, an evidence study which will explore innovative price signal regimes for policy and network costs for domestic consumers. The findings from the Energy Price Signals study will be crucial in supporting BEIS to shape the next steps of the AEM programme, including the proposal below.

Proposal

The AEM Design, Delivery, Research and Evaluation contract(s) would be the next contract(s) that sit within the AEM programme, and would be responsible for the administration of the testing environment, including developing any required digital tool(s) and analysing energy use data received from energy suppliers. Recognising the range of skills, expertise and resource required, the Department envisions that bidders may choose to form a Consortium to deliver these aggregated requirements but is open to alternative proposals. We are also interested in exploring the approach to research and evaluation work.

Work undertaken under this contract would take the discovery, alpha approach to identify and develop tools required to design and implement a potential trial. It might also include a research and evaluation workstream. The first phase (Discovery) would be to identify requirements for data collection and management, recruitment strategy and consumer protection, and a digital tool to administer a trial of alternative policy and networks price signals.

The second phase (Alpha) would be to design such required platform(s) and develop such strategies.

The goal of the final phase (Trial) would be to deploy those solutions in a real-world testing environment by engaging with energy suppliers. The successful bidder may also be responsible for the management & administration of the potential trial. Please note that the shape of and justification for this trial will be informed by the Discovery and Alpha phases and wider BEIS strategic priorities and is subject to change.

Phase 1: Discovery

The Discovery phase would centre around identifying requirements to administer a large-scale trial with energy suppliers. This would entail:

• identifying the data management, data processing, and data sharing requirements to facilitate and manage a real-world testing environment in line with relevant data privacy regulations (i.e. “input” data)
• identifying the quantitative data required to inform the aims of the AEM programme and answer its evidence questions (i.e. “output” data), including how such data should be managed, processed and shared in line with relevant data privacy regulations
• reviewing existing data management platforms
• proposing a digital tool(s), whether existing or new, to administer the trial by assimilating data from energy suppliers
• conducting a feasibility assessment of suggested consumer segmentation & representation

There would be a decision gateway at the end of Phase 1: Discovery to confirm budget required for Alpha phase.

Phase 2: Alpha

The Alpha phase would centre around the development of the tools and strategies required to administer a large-scale trial with energy suppliers. This would entail:

• development of an approach to recruitment and consumer protection to bring suppliers onto the trial and to ensure all targeted consumer groups are recruited onto the trial by participating suppliers
• development of a data management strategy for both “input” and “output” data, and a data analysis plan for “output” data, to comply with requirements identified in Discovery phase
• development of any required digital tool(s) to administer the trial and satisfy data management requirements

There would be a stage gate at the end of Phase 2: Alpha. Funding for Phase 3: Trial is contingent upon wider BEIS strategic priorities and may not be confirmed until the decision gateway at the conclusion of the Alpha stage.

Phase 3: Trial

It is envisioned that the Trial phase would centre around the deployment of the tools and strategies developed in previous phases to administer a real-world testing environment with energy suppliers. This could entail:

• liaising with energy suppliers to mobilise consumers onto an AEM trial and manage their participation
• deploying the digital tool to administer and manage the real-world testing environment
• analysing trial data, including but not limited to analysing energy consumption and accrued funding requirement for alternative charges
• administration of a BEIS budget to cover funding requirement for alternative charges

Only energy suppliers will be able to develop and offer products and services to participating consumers as part of the potential trial, however energy suppliers can work with other energy stakeholders to develop products and services they would offer to consumers as part of the potential trial.

Research and evaluation

Understanding the impacts of the trial, and how suppliers and consumers interact with and respond to the trial, is fundamental to the AEM programme. A research and evaluation workstream will therefore be developed and delivered in parallel to the trial and will consist of both quantitative and qualitative data collection, analysis and reporting. We envisage that the winning bidder (or consortium bid) could deliver both the quantitative and qualitative research required of this programme.

This may include:

• design and development of plans for the collection and analysis of quantitative and qualitative data in line with the programme’s research questions
• identifying counterfactual, control, or comparison groups, either internal or external to the trial
• analysis of quantitative data (e.g. energy consumption data) obtained through the platform described above
• collection and analysis of additional qualitative data beyond the data outlined above to deepen understanding of how and why consumers do or do not respond to price signals
• synthesis of quantitative and qualitative data and submission of six-monthly research reports
• submitting a final research report at the end of the programme

Indicative timeline

• application launch – August or September 2021
• project kick off – October or November 2021
• phase 1 (Discovery) – October or November 2021 to February or March 2022
• phase 2 (Alpha) – February or March 2022 to June or July 2022
• phase 3 (Trial) - September 2022 to February 2025

The full competition guidance and details about an information day will be made available in summer.

Responses

Please email your interest to alternativeenergymarkets@beis.gov.uk titling the email “Early Market Engagement Response”. Include your company name. This will ensure you are notified once further details become available.

Please provide responses by 5pm BST Friday 18 June 2021.

There are three purposes of this early market engagement:

1. Commercial approach: To gauge market interest in applying for this contract in its current format. Given the range of skills required to deliver the contract, we anticipate it may be most effectively performed by a consortium of organisations (although we also remain open to individual organisations with the required skills). Aggregating requirements as proposed could provide efficiencies in areas including operation, management, data sharing, and knowledge and information sharing. We would welcome thoughts on whether this is feasible and thoughts on how the Department can help e.g. whether it would be helpful for the Department to organise a networking session.

2. Technical design approach: To gather market feedback on the proposed contract activities, timelines, and phases.

3. Research and evaluation approach: To gather market feedback on the trial research and evaluation workstream, and the viability of a winning bidder (or consortium bid) being able to deliver both the quantitative and qualitative research, or whether the qualitative research should sit as a separate contract.

The Department welcomes feedback on the topics outlined above.

The market engagement is for planning purposes only. Responding does not advantage a supplier or applicant and failing to respond does not preclude a supplier or applicant from applying to any future competition or participating in a potential trial.