Ofgem has appointed Elexon to drive alignment between local and national flexibility markets, and launched a consultation on a proposed common Flexibility Market Asset Registration (FMAR) solution.
These steps will pave the way for Great Britain’s transition to low carbon generation by enabling more flexible energy use. Flexibility will be key as the nation grows more dependent on variable generation sources like solar and wind. It also offers the potential to drive down costs for consumers.
FMAR is a response to Ofgem’s call for input on the Future of Distributed Flexibility in 2023. It proposes a “one-stop-shop” to register flexible assets such as EV chargers, heat pumps and home battery storage systems, to help maximise participation in flexibility markets by eliminating the need for multiple processes and platforms.
It will form part of the regulator’s Flexible Digital Infrastructure vision and the consultation is the second round of negotiation; Ofgem first called for input in March 2023.
Elexon will act as a market facilitator, overseeing flexible energy use across GB’s local energy networks to ensure the right governance and solutions are in place – the company, owned by National Grid ESO, is the code administrator and central systems delivery body for the Balancing and Settlement Code (BSC).
It will act as a single entity and be accountable for reducing friction across distribution system operator (DSO) markets, aligning the transmission and distributions markets arrangements and developing local flexibility markets. Ofgem has stated that it wants the market facilitator to be fully operational by early 2026.
Ofgem director Eleanor Warburton, said: “To successfully operate the developing low carbon energy system of the future we need more flexible tools to make the best use of our intermittent wind and solar potential along with network and consumer assets to meet demand.”
She added: “We are already starting to see real acceleration in small scale flexible energy use as consumers increasingly access cheaper energy through more flexible consumption.
“As market facilitator Elexon will be able to coordinate and align local and national energy markets to unlock the full value of flexibility. Meanwhile asset registration will create a streamlined one-stop sign-up point, which will help maximise consumer participation in flexible consumption.”
Ofgem pushes for system flexibility
Ofgem said Elexon’s appointment was in light of its “strong track record”. At the start of the year, Current± heard from Elexon chief executive, Peter Stanley, on the importance of flexibility.
He said: “We cannot be certain about how we will want to use the system in future either, as new technology and developments will require us to react quickly to unforeseen challenges. This is another reason as to why flexibility is so important. Creating an environment where it can play a much bigger role in meeting supply and demand is essential.”
The response to Elexon’s appointment has been positive, with the ESO welcoming the announcement. A spokesperson said: “We look forward to working closely with Elexon, Ofgem, the Energy Networks Association’s Open Networks programme and Distribution Network Operators (DNO) to establish a final design for the market facilitator role and to ensure it is successful in its delivery.”
Similarly, the Energy Networks Association (ENA) said: “We’re looking forward to working with Elexon in their new role as market facilitator for local energy flexibility. We’ll work with them to ensure the momentum built up in the Open Networks programme continues during the transition.”
