Flexibility services play a critical role in using the electricity network more efficiently, delivering a smarter, cleaner and cheaper energy system. A significant amount of work is currently under way on governing and regulating these flexibility markets, most notably the recent Ofgem decision on the future of local energy institutions and governance.
As noted in the decision and an open letter released by Ofgem, Energy Networks Association’s (ENA), Open Networks programme is playing a pivotal role in the growth of local flexibility markets in the UK. We are an industry-led programme where national and local electricity network operators have come together to enable this once-in-a-generation transformation to a smarter and more flexible network.
Over the past 18 months, the Open Networks programme has opened up its governance by inviting industry experts to co-develop the programme and help shape the future of flexibility. We aimed to challenge the status quo, putting value for consumers at the heart of our work and completely reshaping the programme for 2023.
We identified the most significant barriers to customers accessing their local flexibility market. We then worked with experts and ensured that our plans were both effective in helping remove these barriers and aligned with wider energy policy.
It was noted that differences in customer journeys across different networks were a barrier for new bidders in the local flexibility markets across Great Britain. In the market’s nascent years, some deviations across the UK’s distribution network operators (DNOs) were necessary to allow for innovation and to allow as many assets as possible to participate in the emerging market. However, operating in business-as-usual circumstances, there is now a clear case for convergence in the specifications and processes of the flexibility market.
The programme has therefore focused on creating a more consistent experience for customers accessing their local flexibility market. This includes the standardisation of the flexibility products with a clear articulation of their parameters, consistency of asset pre-qualification requirements, settlement processes and use of standard contracts, all of which will take effect in the 2024 spring flexibility tenders across DNOs.
Following a clear steer from the industry to accelerate the pace of implementing primacy rules, we are now progressing at the pace of the fastest and are targeting the implementation of primacy rules for over 700 potential ‘use cases’ in the next stage due later in 2024. Our intention is to move first with those DNOs that can use technical solutions to data exchange and then allow others to catch up.
In addition to the above standardisations, we are working to enable the ‘interoperability’ of flexibility systems by implementing strategic steps towards having a common application programming interface (API) for flexibility dispatch systems, which would allow the systems to more easily exchange data. We continue to work closely with Ofgem’s Flexibility Digital Infrastructure team to ensure our work smoothly dovetails with Ofgem’s longer-term policies.
While we continue to work closely with the Department for Energy Security and Net Zero and Ofgem in the development of a smart and flexible network, collaboration with wider industry experts is key. A two-way conversation with industry, academia and government stakeholders is at the heart of the Open Networks programme.
2023 has been a busy year. Going forward the programme is fully committed to growing our ethos of ‘innovation through collaboration,’ being delivery-focused and maintaining the momentum in removing barriers for the UK’s energy markets, whilst remaining agile and able to swiftly adapt to key policy decisions.