Originally introduced during the energy crisis as a winter contingency service to balance the grid during periods of high demand, the National Energy System Operator (NESO) has announced that the Demand Flexibility Service (DFS) can now be repurposed as a year-round service due to improvements in winter margins.
Starting Wednesday, November 27, NESO stated that the DFS “will directly compete with power generators such as gas power stations and wind farms,” allowing it to operate throughout the year instead of being limited to winter months. It also indicated that these changes would enable the DFS to interact with other markets, allowing compatibility between NESO’s national Demand Flexibility Service, the Capacity Market, and regional services offered by Distribution Network Operators.
This means that participating consumers and businesses will have more options to engage throughout the year, increasing the incentive to get involved. The DFS has been recognized as a success in the two winters it has been operational. During the winter of 2022-2023, 1.6 million households and businesses participated in the service, saving over 3,300 MWh. This number increased to over 2.6 million participants the following winter, resulting in savings of more than 3,700 MWh.
Rebecca Beresford, director of markets at NESO, commented on this development: “NESO is excited for this new chapter of the DFS. Opening up access for consumers and businesses to participate in the electricity market year-round is a significant step in the delivery of consumer flexibility.”
NESO is expected to publish its response to its recent call for input on flexibility in December, along with the “Routes to Market” review for demand-side flexibility, where it will outline how to ensure fair market access. Simon Harrison spoke on the first day of the Utility Week Forum in London on November 19, where he suggested that NESO may not have fully explored the potential for flexibility.
As a member of the advisory commission supporting the development of the clean power action plan led by Mission Control CEO Chris Stark, Harrison emphasized that flexibility is “hugely, hugely important” as it can prevent the need for other infrastructure investments. He noted, “Flexibility is a very, very cheap way to address energy challenges. The NESO report has much to say about flexibility, but we in the commission feel that it hasn’t fully tapped into the available possibilities.”
In another development within the sector, Good Energy has announced a pilot scheme that will automatically adjust the usage of heat pumps and batteries without customer input. The 12-month FlexiRewards scheme will allow customers to earn money from their assets without needing to respond to alerts or manually adjust their energy usage. FlexiRewards will monitor participating customers’ assets and automatically modify how each device uses or shares electricity during peak periods.
This initiative follows Good Energy's implementation of the DFS known as Power Pause. The platform is available exclusively to Good Energy customers who have heat pumps or batteries installed by the company, although they do not need to receive electricity from Good Energy. Good Energy stated that customers participating in the new scheme could earn between £5 and £20 per month.
James Rees, Good Energy’s director of product and propositions, explained: “Our goal has always been to empower people to take control of their energy in a way that benefits them and is sustainable for the planet. With FlexiRewards, we’re offering our customers a chance to save and earn money with little to no effort while contributing to a cleaner, more resilient energy system. We hope it will provide new insights into a smart energy future where everyone can play a role in grid efficiency and be rewarded for it.”
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