There’s growing recognition amongst owners of distributed energy resources (DERs) that selling flexibility can offer a Return on Investment (ROI). However, there’s still some scepticism over how easy that is to achieve.
I recently published my “3 top tips for DER operators aiming to participate in flex” to help ease that process for DER operators. I’m keen to share how I applied these in my previous job role, managing the transition from DER operator to flexibility service provider (FSP).
1. Start with discovery
Flexibility is now more accessible than ever, but it can be difficult to understand all the options available. When I first considered getting involved with flex, I went on a hunt for information. I knew that it was a good time to get started. We wanted to be in the best possible position to benefit from opportunities, knowing that they’re growing over time.
I found webinars offered by NGESO and DNOs, and I started to learn more about the potential that flexibility could offer. SP Electricity North West’s “Flexibility Hub” also offers updates and FAQs. There’s also the means to set up a one-to-one discussions with their flexibility team to talk things over.
2. Know the questions to ask
To understand the opportunities in offering flexibility services to the DNOs, I asked questions specific to my company, to assess our options. Which type of market did we want to offer into? How much power (MW) could our assets provide? What was the opportunity cost of the energy that we could offer?
I made sure to ask about the blockers and challenges that I’d be facing. Any new business venture comes with a set of challenges. Having a conversation about them helped my business break them down into more concrete steps to tackle individually.
3. Sign up to participate in flex
Many of the challenges we faced centered around standardisation. Setting up to offer flexibility services means ensuring our data was synced with the DNO’s systems. That meant a new process for each DNO we worked with. We signed up for individual programmes, and we had to stay alert to make sure we were aware of all potential opportunities.
Unfortunately, that meant monitoring different sites and entering asset data in varying forms. This can be laborious depending on the number and type of assets. It’s therefore important to understand the time and resource commitment going in.
I was fortunate that my company saw the value in flex participation, making the upfront time investment worthwhile. For those companies considering offering their flexibility services, getting top-level buy in will help realise the benefits of flexibility much faster.
By continually seeking opportunities, refining, and building a great team working on B2B agreements, we were able to scale up the value of flexibility quickly.
4. Maximise your revenues
To enable scale, market platforms, like ElectronConnect, improve all aspects of the participation process for FSPs; from registration and onboarding to API data sharing and trade verification.
Market platforms allow even the smallest assets to participate in flexibility markets. That’s thanks to simpler and more open access to opportunities – and avoiding all the hours of admin and monitoring that can make participation impossible.
That brings me back to the increased revenues we saw. By using a market platform, we could monitor our asset performance to make sure we maximised revenue per asset.
Market platforms can also help FSPs understand and manage revenue stacking opportunities. This includes the value of “splitting” (i.e. earning revenue and delivering multiple services from the same asset at the same time, but not from the same MW) or “co-delivery” (i.e. being able to deliver multiple services and earning revenue from the same MW at the same time).
We were able to participate in flex markets and turn flex services into one of our main revenue streams. The value was clear, and flex quickly became a core part of our business model. For all those wishing to follow a similar path, I recommend offering flexibility services – and the easiest route, in my experience, is via a market platform like ElectronConnect.
Are you interested in providing flexibility services for either SP Electricity North West or Scottish & Southern Electricity Networks? Register on ElectronConnect or get in touch.
