Elexon has implemented a rule change that allows independent aggregators of electricity to register to participate in the wholesale electricity market.
Elexon says the rule change will help decarbonise the electricity system because many independent aggregators represent consumers, including shops and businesses, that are prepared to adjust their power consumption to keep the electricity system balanced.
Elexon Ltd (operated under a ‘federated model’ ownership arrangement) is the parent company of a group which provides the facilities and resources necessary for the implementation of the Balancing and Settlement Code (BSC).
Previously, electricity consumers were unable to obtain value from their flexibility in the wholesale energy market unless they worked with their supplier to do so, because the BSC assigned all flexibility delivered by a customer to their supplier. The only exception to this is the balancing mechanism (BM) or Replacement Reserve market (TERRE), which can be assigned to a third party (referred to in the BSC as a “Virtual Lead Party”).
Other energy market mechanisms, including the capacity market and balancing services, do allow a customer’s flexibility to be offered by an aggregator independently from a supplier.
The BSC code modification P415 ‘Facilitating access to wholesale markets for flexibility dispatched by Virtual Lead Parties’ means independent aggregators will be able to compete in the wholesale market against suppliers as a Virtual Lead Party (VPL).
Elexon chief executive Peter Stanley said: “The National Energy System Operator’s latest analysis shows scenarios where GB would have around four times as much flexibility by 2030 compared with what was available in 2023.
“To reach that potential, we must create more opportunities for consumers to provide flexibility services. Reforms such as P415 can have a major impact, overcoming barriers to flexibility, and driving growth.”
In July, Ofgem appointed Elexon to drive alignment between local and national flexibility markets, overseeing flexible energy use across GB’s local energy networks to ensure the right governance and solutions are in place.
The rule change comes as part of this role of market facilitator, which Elexon will deliver from early 2026.
Stanley explained: “As the market facilitator, Elexon will be fully focussed on working with flexibility market participants and Ofgem to deliver more open, coordinated and transparent local flexibility markets, and supporting their growth.”
Since April this year, the organisation has supported six companies to register as VLPs, enabling them to participate in the BM.
