The government has set a target for clean power by 2030 and to reach that goal we need flexibility to play a much bigger role in managing electricity supply and demand. However, given the complex nature of the GB energy system, local flexibility markets are currently fragmented and uncoordinated. To address this, in July 2024, Ofgem appointed Elexon as the market facilitator to support these markets.

Enabling distributed flexibility

Distributed flexibility is adjusting behaviours to support balancing and operation of the electricity grid, as the energy mix diversifies, and electrification drives increased demand.

This means households, businesses and generators changing their consumption or output in response to a signal e.g. an instruction from a DSO.

The ENA states that in 2023, network operators tendered a record 6.4GW of capacity on Great Britain’s local flexibility markets, with 4GW contracted. This makes the the UK’s flexibility market the biggest in the world.

Overcoming the barriers

Flexibility providers will need to overcome barriers to enable distributed flexibility. These flexibility providers can include electricity Suppliers (aggregated consumer consumption), small scale low carbon generators, storage operators and businesses.

They have a common ability to increase or reduce either consumption, or electricity output, in response to price signals.

The current challenges they face can include:

  • insufficient visibility of where in Great Britain they can provide their services
  • lack of coordination and common processes for flexibility providers, e.g. for registering to participate in local flexibility markets
  • lack of transparency on decisions about which providers have been contracted to provide flexibility services.

Read more on unlocking local flexibility

Responsibilities of the market facilitator

The market facilitator will be responsible for activities such as:

  • setting stacking rules, which enable one asset to know if it can deliver multiple products
  • setting primacy rules for deciding which market takes precedence when the same asset is called on twice to provide a service
  • standardising flexibility market registration processes for participants.

Useful links and background information