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Record levels of flexibility tendered in 2021 but still ‘only the tip of the iceberg’

In the first seven months of 2021, DNOs tendered for 1.6GW of flexibility. Image: ENA.

In the first seven months of 2021, DNOs tendered for 1.6GW of flexibility. Image: ENA.

Record levels of local flexibility have been contracted in 2021, with an uplift of 45% on 2020 already.

New figures from the Energy Networks Association (ENA) show that distribution network operators (DNOs) have contracted 1.6GW since the beginning of 2021, and are set to further increase this in the coming months.

This is a sizable jump on the 1.1GW contracted across the whole of last year, freeing up still more capacity on the electricity networks during peak periods. Over the past two years, there has been an increase in market liquidity of nearly 40% in local flexibility markets, driving more competitive outcomes.

Earlier in July, Scottish and Southern Electricity Networks Distribution released its largest single offering of flexibility services zones, with 37 new zones that sit across the north of Scotland and central southern England.

In May, SP Energy Networks put out a call for 1.4GW of flexibility services across areas in SP Manweb and SP Distribution. Western Power Distribution concluded its latest flexibility tender too, securing 16.7MW across three contracts.

Also that month, UK Power Networks issued £30 million in flexibility contracts it what it said was the UK’s largest tender to date. This included two thirds of the new capacity – 284MW – coming from using electric vehicles and smart charging as a virtual power plant, while 77% of the capacity is to come from low carbon sources.

Randolph Brazier, director of Innovation and Electricity Systems at the ENA said: “Local flexibility services are a relatively new market but one that has seen an incredible growth over the past three years alone in Britain. Breaking the previous record for flexibility after only seven months of this year is great news for customers and great news for Net Zero.”

By tendering for flexibility, DNO’s are able to both avoid traditional network upgrades and open up new markets. The ENA pointed to the government’s recent Smart Systems and Flexibility Plan, which suggested flexibility could reduce energy system costs by £10 billion a year by 2050, as well as creating 24,000 green collar jobs.

As DNO’s increasingly adopt a “flexibility first” approach, alternative solutions to significant investment in traditional grid upgrades are taking centre stage. In the recent draft RIIO-ED2 plans laid out by the networks operators, the potential of smart charging of electric vehicles and optimisation of domestic batteries to provide flexibility for the system was a key theme that ran throughout.

Tendering for flexibility has been aided by the Open Networks project, the ENA added, which is designed to lay the foundations of a smart, flexible energy system by improving transparency and removing barriers.

While the flexibility space has grown swiftly in Britain there is plenty more room for growth, said Brazier. With networks, Ofgem and Government working to increase flexibility in particular as Northern Ireland is “joining the fold with local DSO flexibility trials, it looks like this market will soon expand to the whole of the UK," he added.

“This is only the tip of the iceberg," Brazier said. "The UK has some of the world’s most ambitious decarbonisation targets and Open Networks is helping to pave the way through flexibility to bring on more low carbon technologies. We’re continuing to power forward, further and faster – in line with Government’s Ten Point Plan and Climate Change Committee targets – to make sure that customers across the country can see the benefits that smarter, more flexible energy networks can bring.”

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