ESO contracts 800MWh of flexibility in first live DFS auctions

Published 23 January 2023

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ESO contracts 800MWh of flexibility in first live DFS auctions

National Grid Electricity System Operator (ESO) has secured around 800 megawatt hours (MWh) of demand flexibility in the first two live auctions for its nascent turn-down service.

The demand flexibility service (DFS) was used “in anger” for the first time on Monday (23 January) between 5pm and 6pm, after securing 330 MWh from participants.

A second live event was triggered for Tuesday between 4.30pm and 6pm.

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Both auctions attracted 19 suppliers and aggregators. The first cleared with bids between £2.80 and £6 per kilowatt hour (KWh), compared to the £3/kWh being paid out through the series of tests the ESO has been running throughout the winter. The second approved bids between £2.80 and £6.50/KWh.

Date From To Required (MW) Procured (MW) Procured (MWh) Cost of accepted bids Cost per MWh
23/01/2023 17.00 17.30 323 323.81 161.905 £693,400 £4,283
23/01/2023 17.30 18.00 336 336.89 168.445 £744,994 £4,423
24/01/2023 16.30 17.00 274 288.62 144.31 £783,793 £5,431
24/01/2023 17.00 17.30 330 314.19 157.095 £637,240 £4,056
24/01/2023 17.30 18.00 341 327.18 163.59 £669,232 £4,091
Total 795.345 £3,528,659 £4,437

On Monday evening the ESO also confirmed it had asked three coal-fired units to warm up as back-up for Tuesday’s crunch point when supply margins are forecast to be tight. A similar request for Monday evening was rescinded.

The bulk of demand for both DFS auctions came from domestic energy suppliers with Centrica, EDF, Eon, Octopus and Ovo all submitting bids.

The DFS has been running tests throughout the winter, with around 800MW saved over the first five tests. Initially only two domestic suppliers – Eon and Octopus – committed to the trial but they have since been joined by most of the major retailers, with 26 participants in total taking part in the ongoing tests.

To read analysis on early learnings from the DFS, including comments from ESO, Eon, Flexitricity and Octopus, as well as customers taking part, click here.