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National Grid Electricity System Operator (ESO) wants the Demand Flexibility Service (DFS) to be used to balance grid demand year round, rather than as a winter contingency service.
Under the ESO’s initial design proposal for the future use of the DFS, the service will continue to exist but with enhancements so that it can be used across the year as a normal commercial service.
The ESO’s executive director Fintan Slye previously told Utility Week that the ESO was exploring a commercial DFS as the ultimate end goal.
Therefore, it said on Tuesday (11 June), the need for the DFS to support the electricity network at peak times over winter has been reduced.
“The ESO has therefore opted to evolve the service and expand its capability to further support high demand periods on the system all year round,” it added.
It is hoped that as an in-merit margin service the DFS will be able to compete against the other commercial tools available to the ESO control room. DFS providers and their customers, ESO added, would for the first time also be able to stack the service with other revenue streams, “ensuring greater opportunities for consumers to realise value from using their electricity flexibly”. The service, which would operate within day dispatch only, would be covered by performance incentives to ensure value for money.
The new DFS design will be consulted with industry over the summer, before a final design is submitted to Ofgem for approval ahead of a planned go-live this winter.
Kayte O’Neill, chief operating officer at the ESO, said: “The Demand Flexibility Service has been a national first in empowering households and businesses to embrace energy flexibility and to be rewarded in the process. As we transition away from requiring DFS as a winter contingency service it is only right that we look to the future of what this service can deliver.
“We look forward to working closely with industry over the coming months to deliver a service that makes flexibility part of everyday life and that can unlock the benefits for participating consumers and society at large.”
Speaking at Utility Week Live last year ESO’s executive director Fintan Slye said he believed the initial trials of the DFS were a “stepping stone” to a full commercial product, possibly for winter 2024/25.
Slye said the success of the scheme showed there was an appetite in society to engage with demand flexibility, despite previous scepticism that this really existed.
He said: “We’re looking to build on that now for next year. We don’t want it to just be a product for an emergency situation. We want to leverage that take-up and interest we had from the various supply companies and customers and build on it to see how we could make it into a normal part of the product suite we have.
“This winter will probably be a stepping stone into that and then the winter after will be about getting the full commercial product out there. We’re still working through that with various companies at the moment.”
During Winter 22/23, 1.6 million households and businesses took part in the DFS, saving more than 3,300MWh. Last winter, this increased to over 2.6 million participants and a saving of more than 3,700MWh.
In January 2024 Utility Week established its Flexibility Forum, in association with our strategic partner CGI, to help break down barriers to energy flexibility growth and provide an independent setting for sense-checking the direction of travel in flexibility market governance and regulation. The Flexibility Forum community includes stakeholders from across the energy value chain. Outputs from the forum to date include a report of the status of demand side flexibility markets in GB and a review of the discussion at the Forum’s first meeting.
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