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UK second worst market in Europe for flexibility according to new report

Power lines in the UK.

Image: Pixabay.

Britain’s power flexibility market is the second worst in Europe, a new report by the Association for Renewable Energy and Clean Technology (REA) has claimed.

The Energy Transitions Readiness Index report, commissioned by Eaton and Drax, assessed nine European markets and found that regulatory uncertainty, a lack of visibility on returns and technical challenges were holding back investment in flexibility in the country.

The report assesses each market on market factors, such as regulations, compensation structures and transaction costs; socio-political factors, such as transparency, socio-economic impact and regulatory alignment; and technology factors, including grid accessibility, EV infrastructure, digital tech enablers and innovation.

Each market is scored from 1 – 5 for those criteria, producing an average score. While Britain scores strongly across socio-political factors and innovation, an average regulatory framework and poor EV infrastructure drags the country’s overall score down.

The report also notes that while Britain has indeed legislated for a net zero target, its regulatory framework will need to be further aligned with it in order to deliver the required changes.

The Netherlands is ranked as the leading market for flexibility of those analysed, followed by Finland, Sweden and Denmark. Of those markets analysed, only France ranks worse for flexibility than Britain.

Robert Hull, author of the report said: “In Britain, the strong ambition for the energy transition and growing flexibility markets hasn’t yet translated into the market and regulatory framework, which is complex and slow to change.”

As efforts to decarbonise the electricity grid increase, more flexibility will be needed to balance intermittent renewables.

The chief executive of the REA, Dr Nina Skorupska, said that “Decarbonising power means delivering flexibility.”

“In a world of very low-cost variable renewable electricity generation, grids need to be organised differently and some services which were once taken for granted need to be actively procured.

“Crucially, as renewable power prices fall around the world every country will be experiencing the same shift. If Britain becomes a flexibility pioneer, then a whole world of markets for exporting our products and services opens up. Whilst this index shows we’re lagging behind, there’s still time to bounce back.

Drax head of strategy Robert Riley echoed her sentiments, saying: “Flexibility is essential to enable net-zero carbon in Britain for 2050. It reduces the risks of power cuts and builds resilience into the grid so that the system can handle the volume of intermittent renewables that we’ll need. Without these flexibility services, it’s going to be much harder, and more costly, to transition to a cleaner electricity system.

“There’s a huge potential for innovative flexible technologies to play a role. More could be done to provide a level playing field, and clarity on business models so that they can contribute to the zero-carbon ambition.”

Eaton head of energy storage business Fabrice Roudet, meanwhile, said the need for greater clarity was now urgent, adding that policy makers needed to put an end to the flux in order to spur private investment in new technologies.

Around the UK, efforts are underway to increase flexibility. UKPN this week announced its ‘biggest ever’ competition for flexibility on energy tech start-up Piclo Flex. Also this week, Centrica lauded the launch of what it said was a ‘world first’, as its Local Energy Market platform enabled National Grid ESO and Western Power Distribution to simultaneously procure flexibility.

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