- By creating a supplier-led physical hedging model for renewable portfolios to contract and dispatch flexibility, this partnership addresses growing imbalance volatility driven by energy system changes, including offshore wind expansion
- The partnership accelerates tem’s mission to move beyond the inefficient wholesale market altogether, helping make energy transactions transparent, fair and affordable
Published on 23 February 2026
tem, the energy transactions scaleup, and Electron, the UK’s leading flexibility marketplace provider, have launched the UK’s first physical-hedging market. This market is enabling renewable suppliers to manage their imbalance risk using real-time support from flexible energy assets.
With renewable energy becoming the UK’s biggest source of electricity, and offshore wind capacity continuing to scale rapidly, suppliers are facing increasing exposure to imbalance volatility when forecast energy supply doesn’t match real-time conditions.
Today, most renewable suppliers rely on financial hedges via the wholesale market, managing imbalance risk through price exposures – often activating at the moments in which energy is most expensive, resulting in unexpected higher costs for customers.
The physical hedging market, created through the tem and Electron partnership, allows tem to reserve flexible capacity, in advance, from existing distributed energy assets, such as battery storage. tem will then call on that reserved capacity when forecasts diverge from real-time conditions; instead of at the time that their hedge has the highest financial value. Accordingly, the model will lower tem’s hedging costs while unlocking new, secured revenue streams from existing infrastructure, without disrupting the day-to-day trading strategies of the batteries.
This enables:
- Lower and more stable imbalance and peak-risk costs for renewable suppliers, by reducing reliance on the most expensive financial hedging products.
- Stable, recurring revenue for flexible energy assets, delivered through reservation and utilisation payments under short-, medium- and long-term contracts.
- A more cost-efficient approach to system balancing, expanding participation beyond large fossil-fired plants to distributed, low-carbon assets.
- Clearer, data-led portfolio risk management, as variable generation increases forecast uncertainty.
Under the model, participating asset operators receive an annual reservation payment for committing a small portion of capacity, alongside utilisation payments when that capacity is called upon. These payments are designed to complement existing routes to market, including the Capacity Market, ancillary services and wholesale trading.
ElectronConnect, Electron’s flexibility market platform, manages onboarding, contracting, dispatch and settlement, while enabling tem to issue day-ahead signals so assets can continue participating in other markets when not required.
Joe McDonald, co-founder and CEO of tem, says: “tem was built to rethink how electricity is transacted, reducing dependence on costly wholesale trading layers that sit between the system and its users. By integrating real physical flexibility through our partnership with Electron, we’re extending that infrastructure to manage the growing imbalance between supply and demand across every half hour of the day, driven by the rapid expansion of variable renewables. The result is a more complete, end-to-end transaction model for electricity, one that reallocates value away from intermediaries and back towards the assets and participants that actually keep the system running.”
Jo-Jo Hubbard, CEO and co-founder of Electron, adds: “We are extremely excited to bring this product to market with the team at tem. While it is essentially just a simple capacity product, what’s new is the buyer and the value. tem is introducing new revenue streams for DER operators; they are willing to pay above today’s capacity market value, making this opportunity particularly attractive to assets looking to secure or securitise future revenues; and the limiting factors that make today’s capacity market better suited to gas than low carbon technologies and flexibility do not apply here. This market will showcase flexibility in the light it deserves: as both a system resource and an investable, predictable revenue class for providers.
Notes to editors
Press contact: tem@wordsandpixels.co
About tem
tem is an AI-native energy transactions scaleup founded in 2021 by four energy experts who scaled and exited Limejump – Joe McDonald, Jason Stocks, Bartlomiej Szostek, and Ross Mackay. Having seen first-hand the inefficiencies and opacity of the old-world wholesale market, tem is replacing it with new-world technology that puts transparency, efficiency and affordability at the heart of every transaction. tem serves customers including Canva, BOXPARK, Fever-Tree and Silverstone Circuit, and is backed by leading global investors, including Atomico and Albion VC.
About Electron
Electron runs flexibility markets for DSOs and the grid edge, unlocking fast, low-cost capacity from millions of flexible distributed energy resources (DERs). By pairing grid analytics with flexibility markets, Electron reveals where DERs are and what they’re worth, so flexibility can scale wherever it makes technical and economic sense. Trusted by customers across the UK and North America, Electron is helping build a more cost-effective, reliable, and resilient energy system.
