Energy regulator Ofgem has approved plans to include independent aggregators in the wholesale flexibility market.
The modification to the Balancing and Settlement Code (BSC) P415 ‘Facilitating access to wholesale markets for flexibility dispatched by Virtual Lead Parties (VLPS)’ will enable independent aggregators to participate in the wholesale flexibility market from 7 November 2024.
Ofgem stated that the modification will “lead to an increased amount of flexibility in the balancing market”.
The energy regulator also stated that it “will incentivise increased participation by consumers who can adjust their demand or generation in response to price signals in the wholesale electricity markets”.
This is something that is otherwise known as load shifting, Ofgem noted, and moves electricity consumption from one time-period to another to allow demand and supply to be more closely matched, optimising energy use and reducing the curtailment of generation.
An Ofgem panel “unanimously” agreed on the modification on the basis that it supports several BSC objectives.
‘Watershed moment’ for long-term energy affordability
The energy industry has welcomed the approval of the P415 modification with the Association for Decentralised Energy (ADE) labelling it a “watershed moment” for long-term energy affordability by broadening access to the wholesale market.
Commenting on the approval, Sarah Honan, flexibility policy manager at the ADE, said: “Today is a watershed moment for the UK flexibility sector. Thanks to a decision by Ofgem, the wholesale market – where the vast majority of electricity is bought and sold – will open its doors to participants beyond suppliers, generators, and financial traders.
“Independent aggregators of demand flexibility, who will play a crucial role in decarbonising our electricity system, will be able to participate in our largest market. It is likely that we will look back on this decision as heralding a step-change in how we consider electricity market trading both in the wholesale market and beyond.”
