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Insight
Introduction
Energy flexibility is coming of age. Its market structures and ability to support dynamic matching of supply and demand across the power grid are falling into place. The use of flexibility to resolve network constraints is becoming more common.
Flexibility reached mainstream consciousness last winter when National Grid Electricity System Operator launched its Demand Flexibility Service (DFS). 1.6 million households across the nation engaged with the new opportunity to cut their energy bills and support security of supply, strongly motivated by high energy costs. Looking ahead to this winter, the ESO says it expects a three-fold increase in participation in the service with up to 2GW of capacity potentially being released.
But while the DFS may have grabbed the headlines, it is far from being the only major milestone in the development and use of energy flexibility across the power system. At distribution level there has also been good progress in the use of energy flexibility to help release additional network capacity and accommodate applications for grid connections from distributed energy resources. Since early this year, this progress has gained added momentum thanks to the formal creation of Distribution System Operators, dedicated to optimising and balancing local systems, by the various electricity distribution license holders.
In August, the Energy Networks Association revealed there had been a record 4.6GW of capacity tendered in local flexibility markets in 2022-23 with 1.9GW contracted. 70% of the contracted flexibility came from low carbon technologies.
These signs of progress are extremely encouraging, providing a much-needed dose of optimism amid increasingly dire indications of increasing climate change impacts around the globe. However, before energy flexibility can really play the prominent role we need it to in in combating climate change – by enabling quicker decarbonisation of the UK energy system at an affordable cost – some key challenges still need to be addressed for existing and would-be participants in flexibility markets.
Some of these challenges relate to commercial and regulatory arrangements. But a number are also attached to questions over data. There are gaps in the availability of certain data types and issues about the quality and accessibility of the data being published by DSOs and other key system stakeholders.
To try and create more definition around these issues and enable a more-focused approach to resolving them, Utility Week hosted a private debate for a diverse set of energy flexibility stakeholders, in partnership with SSEN Distribution. The debate encouraged participants to identify how and why data issues are challenging the potential of energy flexibility, both in relation to their own organisational ambitions and the national net zero carbon mission.
This report summarises the key points raised during this debate.
“In August, the Energy Networks Association revealed that there had been a record 4.6GW of capacity tendered in local flexibility markets in 2022-23 with 1.9GW actually contracted. 70% of the contracted flexibility came from low carbon technologies.”
Introduction
Energy flexibility is about to come of age. After a drawn out period of adolescence, market structures and governance frameworks to support dynamic matching of supply and demand across the power grid are gradually falling into place and the use of flexibility to resolve network constraints is becoming increasingly commonplace.
Flexibility hit mainstream consciousness last winter when National Grid Electricity System Operator (ESO) launched its Demand Flexibility Service. 1.6 million households across the nation engaged with the new opportunity to shave money off their energy bills and support security of supply, strongly motivated by a concurrent energy costs crisis. Looking ahead to this winter, the ESO has said it expects a three-fold increase in participation in the service with up to 2GW of capacity potentially being released.
But while the DFS may have hogged national headlines, it is far from being the only major milestone in the development and utiltisation of energy flexibility across the power system. At distribution level there has also been steady progress in the use of energy flexibility to help release additional network capacity and accommodate applications for grid connections from distributed energy resources. Since early this year, this progress has gained added momentum thanks to the formal establishment of Distribution System Operators, dedicated to local system optimisation and balancing, by the various electricity distribution license holders
In August, the Energy Networks Association revealed that there had been a record 4.6GW of capacity tendered in local flexibility markets in 2022-23 with 1.9GW actually contracted. 70% of the contracted flexibility came from low carbon technologies.
These signs of progress are extremely encouraging, providing a much needed dose of optimism amid increasingly dire indications of runaway climate change impacts around the globe. However, before energy flexibility can really play the prominent role we need it to in in combatting climate change – enabling accelerated decarbonisation of the UK energy system at an affordable cost – some key challenges still need to be addressed for existing or would-be participants in flexibility markets.
Some of these challenges relate to commercial and regulatory arrangements. But a number are also attached to questions over data. More specifically, there are gaps in the availability of certain data types and flaws in the quality and accessibility of the data being published by DSO’s and other key system stakeholders.
To try and draw greater definition around these problem areas and enable a more focused approach to resolving them, Utility Week hosted a private debate for a diverse set of energy flexibility stakeholders, in partnership with SSEN Distribution. The debate encouraged participants to identify how and why data issues are stifling the potential of energy flexibility, both in relation to their own organisational ambitions and the national net zero carbon mission.
This report summarizes the key points raised during that debate.
“In August, the Energy Networks Association revealed that there had been a record 4.6GW of capacity tendered in local flexibility markets in 2022-23 with 1.9GW actually contracted. 70% of the contracted flexibility came from low carbon technologies.”
Fuller insight into the challenges and ideas shared during out debate can be found in the Debate insights chapter of this report. However, in summary, the priorities for improvement of data availability, quality and presentation identified by participants were as follows:
- Standardisation: Establishing a common format for DSO data sets, supported by public APIs and a trusted data governance framework
- Granularity: More granularity in available data, including details around operation of constraint managed zones
- Accessibility: Greater ease of access to smart meter data
Underlying these priority areas was a shared vision between participants for an interoperable ecosystem for flexibility. This was considered the essential foundation for driving competition, innovation and value for end consumers and the environment via accelerated decarbonisation.
A taste of the debate: prominent quotes from our industry participants
“We can develop business cases until we’re blue in the face. But what we need to know is where the best places are to develop, and to and to invest.”
Local authority energy manager
“It’s the system level data which would add most value to us…[to give a] better understanding of where the system need for flexibility is. This might mean information on network congestion, ANM [Active Network Management] dispatch data – and all as granular as possible to enable us to really understand were the need for flexibility is going appear.”
Flexibility markets leader at a major energy supply company
“We’ve raised with Ofgem the need for an incentive on DSOs for regular reporting of, not just overall curtailment, but specifically curtailment and ANM. Because its patchy at best at the moment.”
Flexibility commercial and product strategy leader at a major energy supply company
“More public access to data – and public APIs as well that can easily be used to find opportunities, to find constraint zones – would be really helpful.”
Flexibility commercial and product strategy leader at a major energy supply company
“I don’t think there is any question,” they said. “We are under utilising the £15 billion investment in smart metering. We’re not accessing a lot of the information that would be of value to networks on a routine basis, such as voltage and loading on particular feeders for example.”
Found and chair of a smart home energy management company [Link to accessibility box]
in association with
