Elexon has published a provisional plan for the handover of flexibility market rule development as its role in the UK market continues to evolve.
In July last year, the UK’s energy regulator, Ofgem, proposed that Elexon, which manages the Balancing and Settlement Code (BSC) in the UK, take on the role of market facilitator from the end of 2025, in order to ensure the goals and actions of both national and local electricity flexibility markets are aligned.
This change was announced ahead of National Grid ESO’s transition to the National Energy System Operator (NESO). In its new role, Elexon will work to reduce friction between the various distribution system operator (DSO) markets while also aligning the transmission and distribution markets and developing local flexibility markets.
To ensure a smooth transition to this new role, Elexon has published an interim plan for how it will take on the role as the Electricity Networks Association (ENA) Open Networks programme closes. The phased handover will take place between now and July, with proposed Day 1 Flexibility Market Rules set to be consulted on in August and November before being finalised in November 2025. Ofgem has previously stated that it wants the market facilitator to be fully operational by early 2026.
Early priorities
This year, Elexon states it will develop robust governance processes, establish working practices, and build capability and knowledge. Additionally, Elexon will work on developing a common Flexibility Market Asset Register (FMAR) between now and H1 2026.
The development of the FMAR will see the flexibility market system change from its current state, wherein flexibility aggregators or asset owners must register their assets multiple times for all the markets they wish to participate in, to a more streamlined system. Under the new system, aggregators and asset owners will be able to register their assets for the market either through NESO, local DSOs, or directly into the register itself, and will only need to register each asset once.
The various technical working groups from the Open Networks programme will be handed over to Elexon in a phased manner, starting with those that are most significantly developed.
In September, Elexon was appointed by the ENA to lead the Open Networks Challenge Group, the ENA’s strategic initiative that brings together government and industry stakeholders to enable a more flexible energy network in Britain, alongside representatives from Octopus Energy, Energy UK, the Association for Renewable Energy and Clean Technology (REA), E.ON, Imperial College London, and the Welsh government.
In batch one, which will take place this month, technical working groups surrounding flexibility products and stackability, the settlement process, prequalification, and the Standard Agreement will be handed over to Elexon. The handover of primacy rules and carbon reporting will happen in May under batch two, and control of dispatch interoperability, baselining, and flexibility figures being handed over in July as the third and final handover batch.
Furthermore, Elexon has stated this year it will prioritise creating an end-to-end process for procuring and delivering flexibility services, establishing a clearer understanding among stakeholders of how to use and adapt the standard agreement for market participants, defining the longer-term vision for market coordination, and ensuring that the rules it develops are as accessible, useable, and maintainable as possible.
Elexon is seeking feedback on its proposed transition plan until 30 April.
