New figures from Energy Networks Association (ENA) reveal record levels of local flexibility have been contracted by Britain’s electricity distribution networks this year. An impressive 1.6GW has been contracted since the beginning of 2021 to date, and this is set to increase in the coming months as more flexibility is tendered out. This is an uplift of 45% since 2020 when 1.1GW was contracted for the whole year.
This flexibility will free up 1.6GW of capacity on the electricity networks during peak periods, the equivalent of connecting 32,000 rapid EV chargers (50kW) to the grid or half the size of the proposed nuclear power station at Hinckley Point C (3.2GW).
Unlocking network capacity by using flexibility services opens up new markets which will not only avoid the need for traditional network reinforcement and save customers money but will also power the energy system towards a Net Zero future. Flexibility is also a key aspect of delivering a green recovery as it enables us to meet Britain’s targets for the widescale roll out of EVs and heat-pumps. New figures from Government's Smart Systems and Flexibility Plan show that flexibility could also reduce annual energy system costs by £10bn a year by 2050 while also creating 24,000 ‘green collar’ jobs.
This record has been achieved through adopting a “flexibility first” approach where the network operators look to the market to seek alternative solutions to all significant traditional investment that would otherwise be required to solve congestion on the grid. These solutions include smart technologies, which offer faster, more cost efficient and environmentally friendly services to unlock capacity. Customers are paid for these services, which could include reducing their energy usage at certain times of the day or using battery storage to inject power into the grid.
A recent report revealed that the UK’s electricity networks lead all their competitors in Europe for supporting and delivering flexibility services. This is good news for energy innovators as more stakeholders than ever before are looking to take part in flexibility tenders, building a mosaic of different options. We have seen an increase in market liquidity of nearly 40%1 in the past two years in these local flexibility markets, driving more competitive outcomes with customers benefitting from more cost-efficient solutions. There are still significant opportunities for growth for flexibility service providers this year with some tendered capacity still not contracted.
This flexibility bonanza has been driven through ENA’s Open Networks project, which brings together all of Britain’s network companies and industry stakeholders to help transform the way our energy networks operate. Now in its fifth year, the project is playing a pivotal role in facilitating the move towards a Net Zero future by laying the foundations of a smart, flexible energy system in Great Britain that leaves nobody behind – including improving transparency, removing barriers and simplifying participation.
Randolph Brazier, Director of Innovation and Electricity Systems at Energy Networks Association which represents the UK and Ireland’s energy networks businesses 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.
“However, there is still plenty of room for growth and we are not resting on our laurels; networks, Ofgem and Government are working together to increase the amount of flexibility in the energy system of the future, and we very much welcomed the release of the latest version of the Smart Systems and Flexibility Plan. With Northern Ireland also joining the fold with local DSO flexibility trials, it looks like this market will soon expand to the whole of the UK.
“This is only the tip of the iceberg. 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.”
While flexibility services have so far tended to focus on the industrial and commercial sectors, the next big step for both Open Networks and industry is harnessing the power of residential flexibility through EVs, heat pumps and other domestic smart technologies – delivering direct benefits to customers across the country.
The latest figures have been published ahead of a wide-reaching consultation on flexibility, which launches later today and is open for eight weeks (until Friday 24 September). ENA’s Open Networks project team are welcoming responses from the energy industry and beyond on how the project can further drive standardisation in local energy markets right across the country. Industry viewpoints are vital and bring the energy system closer to the people it serves by identifying barriers to entry, which, when overcome, will enable new parties to get involved in the market of the future – such as sites with electric vehicle charge-points.
Notes to editor
- 1 Market liquidity increase figures: 2019 (19.6%) to 2021 (56.5%) = an increase of 36.9%
- The latest round of collated flexibility procurement figures are available on ENA's Flexibility services web page.
- The Open Networks flexibility consultation document is available on ENA’s website, where more information including detailed product overviews is available. To complement the consultation, the project is hosting two webinars:
- Flexibility Consultation Webinar - Overview and Q&A: 18 August, 14:00, register to attend
- BusinessGreen and ENA partnered event - Flexible futures: Exploring the role of flexibility in the net zero transition: 8 September, 14:00, register to attend
- Optimal regulation for European DSOs to 2025 and beyond, Centre on Regulation in Europe (April 2021)
- Centre on Regulation in Europe (CERRE) promotes robust and consistent regulation in Europe’s network and digital industries. CERRE’s members are regulatory authorities and operators in those industries as well as universities
- GEODE: Founded in 1991 GEODE is made up of European independent distribution companies of gas and electricity. The association represents more than 1200 companies in 15 countries, both private & public owned. We serve a population of 100 million people
- ENA’s Open Networks project brings together electricity transmission and distribution network companies with industry stakeholders, the Department for Business, Energy and Industrial Strategy (BEIS) and the energy regulator Ofgem, to lay the foundations for the smart grid in Great Britain and inform future developments in Northern Ireland and the Republic of Ireland
- Examples of flexibility services include:
- Households charging their electric vehicles at off-peak times or when it is sunniest, whilst other households’ domestic solar panels are generating electricity.
- Businesses striking demand-side response agreements to adjust their electricity use at the times of day when they least need it, helping reduce the need and cost of building new infrastructure
About Energy Networks Association
Energy Networks Association (ENA) is the industry body representing the companies which operate the electricity wires, gas pipes and energy system in the UK and Ireland.
ENA helps its members meet the challenge of delivering electricity and gas to communities across the UK and Ireland safely, sustainably and reliably.
Its members include every major electricity and gas network operator in the UK and Ireland, independent operators, National Grid ESO which operates the electricity system in Great Britain and National Grid Gas which operates the gas system in Great Britain. Its affiliate membership also includes companies with an interest in energy, including Heathrow Airport and Network Rail.
What are energy network operators?
Energy network operators manage and maintain the wires, pipes and other infrastructure which delivers electricity and gas to your home, business and community. They are private companies which are regulated by Ofgem and employ around 45,000 people in the UK and Ireland. They are represented by their industry body, Energy Networks Association (that's us).