Government and Ofgem must ‘throw their weight’ behind DFS

Government and Ofgem must “throw their weight” behind this year’s Demand Flexibility Service (DFS) to maximise its potential this winter, Energy UK has urged.

A total of 1.6 million households and businesses participated in the first iteration of the scheme, introduced by National Grid Electricity System Operator (ESO), which ran from November last year to March 2023, delivering in total 3,300MWh of electricity reduction.

The ESO is looking at re-running the service again this winter, with trade body Energy UK chairing a working group on the DFS.

Speaking to Utility Week Naomi Baker, Energy UK’s senior policy manager, said the message from the trade body’s members “is loud and clear” in that the ESO “can make the service even bigger and better, especially with the addition of greater participation from industrial and commercial customers”.

She added: “However, if we are to match that ambition and make the most of a cheaper and cleaner alternative, suppliers need clarity now on the expectations around the service, like the number of tests and the prices that will be paid, so that they can put together a business case and additionally have the time to automate their services. While it is NGESO that commissions the service, they need Ofgem and DESNEZ to throw their weight behind this.

“DFS can be the country’s flexible friend this winter, helping balance the grid in cheaper and cleaner fashion than the alternatives and in a way that epitomises the future of the energy system and consumer interactions with energy. If we leave finalising the details until the autumn, there will only be enough time to run something akin to a repeat pilot.

“It would be a huge shame if we waste this opportunity by waiting until winter to deal with winter’s consequences.”

Responding to these concerns an ESO spokesperson said: “Last winter’s Demand Flexibility Service was a first of its kind for Great Britain, with millions of consumers and businesses actively participating in demand-side energy system flexibility at scale.

“We continue to work with industry partners and the energy regulator to develop the final terms of the service for the coming winter.”

A spokesperson for the Department for Energy Security and Net Zero said: “Russia’s illegal invasion of Ukraine means the world is likely to face continued energy challenges this winter, but we are confident that the steps we are taking will bolster energy security this winter, with National Grid currently expecting a sufficient electricity surplus across the winter months.

“National Grid ESO recently consulted on running a flexibility service this winter and we are working closely with them in reviewing the findings. They will respond to this in due course.”

Naomi Baker has written more about this subject in a blog on Energy UK’s website. You can read it here.