The UK flexibility market continues to grow. In 2025/26, SP Electricity North West more than doubled the flexibility it dispatched, up 102% on the year before, while SSEN grew its procured flexibility by 37% to nearly 1GW since 2024/2025. New regulations and digital infrastructure are coming into play to support the National Energy System Operator’s target of 12GW consumer-led flexibility by 2030.
Here are the latest updates on UK flexibility markets, and seven questions shaping them in 2027.
Energy flexibility or grid flexibility?
Energy flexibility balances supply and demand across the whole power system, through wholesale, balancing, and capacity markets.
Grid flexibility uses many of the same assets to free up room on specific parts of the network, easing congestion and connecting customers sooner.
Read more in Jo-Jo Hubbard’s blog on unlocking the grid.
This blog covers:
- How is market-wide half-hourly settlement changing UK flexibility?
- How is the Demand Flexibility Service expanding?
- What does the Clean Flexibility Roadmap update mean for 2027?
- How are Elexon and new digital infrastructure making flexibility markets easier to join?
- How will RIIO-ED3 change the way DSOs fund flexibility?
- How will connections reform bring flexibility into new demand connections?
- Are UK flexibility markets moving closer to real time?
1. How is market-wide half-hourly settlement changing UK flexibility?
Market-Wide Half-Hourly Settlement (MHHS) is moving Great Britain’s electricity system from estimated billing to settlement based on actual half-hourly consumption data. In October 2026, every participating company qualified for the new arrangements, with around 75% of meters already migrated.
Ofgem’s approval of BSC Modification P483 in August 2025 helped accelerate this progress. The modification removed the half-hourly settlement requirement for aggregators to trade domestic flexibility. This allowed Virtual Lead Parties (VLPs) – independent aggregators that sell flexibility to the system operator without being the customer’s energy supplier – to access around 345,000 households and small businesses previously excluded from UK flexibility markets.
What to watch in 2027: Suppliers must finish migrating meters by 7 May 2027, with cutover to the new settlement timetable in July 2027.
2. How is the Demand Flexibility Service expanding?
The Demand Flexibility Service (DFS) gives homes and businesses a simple way to participate in the electricity market and get rewarded for shifting when they use power. DFS works through retailers, who invite customers to change their electricity consumption, depending on what the system needs.
Since April 2026, DFS offers bi-directional flexibility for the first time. That means that participants can get rewarded for reducing their use during peak times, but also consuming more electricity when low-carbon energy is available. Plus, the eligibility threshold has dropped from 1MW to 0.1MW, opening up participation for smaller suppliers and businesses.
Since 7 October 2026, DFS also covers constraint management, replacing the Local Constraint Market, so providers can respond to both margin and constraint needs through one service. NESO forecasts £3.2 billion in constraint costs over the 12 months from August 2026.
What to watch in 2027: NESO’s Demand for Constraints tender opens for consultation in March 2027, followed by an expression of interest stage in June and an invitation to tender in October. It is aimed at existing demand sites that can offer extra flexibility.
3. What does the Clean Flexibility Roadmap update mean for 2027?
In July 2026, the government, NESO, and Ofgem published the first annual update to the Clean Flexibility Roadmap. The 2025 version estimated that Great Britain’s clean flexibility capacity needs to roughly double or triple, to between 51GW and 66GW, by 2030.
NESO has already set a minimum ambition to deliver an additional 750MW of industrial and commercial flexibility through its markets by 2030. The update reports that the first-year target of 170MW has been met.
What to watch in 2027: By Q3 2027, NESO plans to let VLPs and suppliers join the Balancing Mechanism through a single, digital-first entry point. During 2027, it will also build a Market Navigator Tool showing providers what they could earn, and how they could stack revenues, across its markets.
4. How are Elexon and new digital infrastructure making flexibility markets easier to join?
The UK is advanced in its use of flexibility markets, yet participation across multiple flexibility markets can be complex. This creates barriers for service providers and can reduce the volumes available in each market.
In December 2025, Elexon officially became the market facilitator, tasked with coordinating and aligning these markets so participants can interact more easily with both local and national grid operators. Its delivery plan, running to March 2028 and revised in July 2026, builds on the Open Networks programme’s earlier standardisation work.
The Flexibility Markets Unlocked programme is an example of a standardisation pilot, developing the Flexify concept, a web-based solution around improving UK flexibility market access. NESO’s Data Sharing Infrastructure, which completed its pilot phase in March 2025, aims to remove the need for separate data agreements with each market operator, currently a major barrier that limits participation to sophisticated flexibility service providers (FSPs).
DSOs are also lowering barriers in their own markets. SP Electricity North West credits lower participation thresholds, its Flexibility Hub, and automated eligibility checks with a 450% rise in registered flexibility assets and record provider numbers in 2025/26.
What to watch in 2027: Elexon plans to roll out a common dispatch API across DNOs in 2027 and then extend it to NESO. Phase 1 of its single asset registration system, Flexibility Market Asset Registration (FMAR), is due by September 2027.
5. How will RIIO-ED3 change the way DSOs fund flexibility?
RIIO-ED3, the next price control for Britain’s electricity distribution networks, runs from April 2028 to March 2033, and it changes how flexibility is funded. Under Ofgem’s May 2026 methodology decision, DNOs will have to show they have properly considered flexibility and other alternatives before they commit to reinforcement. Flexibility also gets its own allowances, separate from funding for building the network.
What to watch in 2027: DNOs submit their final business plans in December 2026, and Ofgem’s draft determinations are expected in summer 2027, with final determinations to follow before ED3 starts.
6. How will connections reform bring flexibility into new demand connections?
Flexible connections are moving into the design of the UK connections process. In its October 2026 response on connections for strategic demand, the government called flexible connection arrangements for demand “a proportionate and necessary intervention”. With Ofgem, it is developing three measures.
- The first is connection agreements that let demand users connect sooner on non-firm, phased, or part-firm terms.
- The second is voluntary flexibility services that reward large users, including data centres, for reducing or shifting demand.
- The third is a backstop allowing the system operator to curtail large loads in rare security-of-supply emergencies.
This mirrors the case Jo-Jo Hubbard made in her blog on unlocking the grid: that most new large connections should start out flexible.
What to watch in 2027: Ofgem’s decisions on a Data Centre Commitment Fee, designed to clear speculative projects from the queue, and on developer self-build are both due in Q1 2027.
7. Are UK flexibility markets moving closer to real time?
Recent trials through flexibility markets show how flexibility continues to cement its place in network operations.
In early 2025, SP Electricity North West became one of the first DSOs to dispatch flexibility in real time through ElectronConnect. A fleet of Axle Energy assets responded to a dispatch instruction within 15 minutes, and adjusted electricity output to relieve local grid constraints.
SSEN introduced day-ahead markets in November 2025. Moving into 2026, SSEN and Electron completed a live trial using day-ahead markets to reduce the risk of outages during planned maintenance works in Maidenhead. Configured and launched within a week, SSEN procured flexibility at short notice to support customer supplies during those works.
SP Energy Networks is moving the same way. Its 2026 procurement report shows that more of the flexibility it contracts through its month-ahead market, launched in 2024, gets dispatched than through longer-term tenders, and it has begun work on week-ahead and day-ahead products.
What to watch in 2027: More DSOs may start adding week-ahead and day-ahead products alongside longer-term tenders, as flexibility becomes more responsive and embedded in how networks are run day to day.
What comes after 2027 for UK flexibility?
RIIO-ED3 begins in April 2028, with flexibility funded in its own right for the first time. The challenge now is maintaining that pace as market platforms scale to accommodate the millions of flexible assets needed for the energy transition.
See how the same pressures are playing out in our EU energy flexibility trends and US grid flexibility trends blogs.
Frequently asked questions
What are local flexibility markets in the UK?
Markets run by distribution network operators to buy flexibility in specific areas of their network, to manage congestion, outages, and planned works. Our guide to flexibility market types explains the main models, and our guide for UK flexibility providers covers how to take part.
What is the Demand Flexibility Service?
A NESO service that rewards homes and businesses for shifting when they use electricity. Since October 2026, it also covers constraint management.
What is market-wide half-hourly settlement?
The move to settle every electricity meter in Great Britain on actual half-hourly consumption data, instead of estimates. Meter migration is due to finish in May 2027.
What is the flexibility market facilitator?
Elexon’s role, since December 2025, coordinating and aligning Britain’s local and national flexibility markets so that providers can take part more easily.
What is a flexible connection?
A grid connection where the user agrees to reduce imports or exports when the network is constrained, in return for connecting sooner than a firm connection would allow.
What is RIIO-ED3?
Ofgem’s price control for Britain’s electricity distribution networks from April 2028 to March 2033. It funds flexibility through its own allowances.
Read more
EU flexibility trends for 2027: 7 questions answered
Here’s an overview of some of the trends affecting how that flexibility will develop in the EU in 2027.
A guide to flexibility services for UK providers
What FSPs need to know about participating in UK flexibility markets.
Your guide to flexibility market types and how they work
Here’s an overview of the key flexibility market types and the network challenges they help address.
