There’s plenty on the horizon for flexibility markets in 2024, from a project to create an ecosystem of tools to ease access to flex marketplaces, to the launch of the Future System Operator in the UK. This range of activity and investment simply reflects the growing importance of flexibility to the energy transition.
What to expect from flex markets in 2024:
- The first iteration of the Future System Operator to launch
- Operational standardisation is the mantra of the Open Networks programme for 2024
- A DESNZ study to address distribution level challenges in flex markets
- Trials for a new market design to be launched through BiTraDER
- Flex tech solutions to be strengthened through customer service
The first iteration of the Future System Operator to launch
As made official in the Energy Act 2023, the National Energy System Operator (NESO) – formerly the Future System Operator (FSO) – will come into play in 2024. The ESO will assume this role, with additional responsibilities on top of those it already holds.
Eventually, the FSO will provide a whole system view of the energy sector. This will align the entire industry to a single strategic vision. To get there, it will initially:
- Start to plan gas and electricity networks
- Help DESNZ with market development for gas and electricity
- Identify risks to and gaps in whole system resilience
- Focus on electricity security of supply – to later spread to gas security
- Advise the government on Net Zero
This initial iteration of the NESO is expected to go live from June 2024.
The creation of a “market facilitator” role is also in progress. A consultation will close in February, addressing whether the NESO or Elexon should deliver this.
The facilitator would aim to create more transparency and coordination between distribution and transmission market arrangements. That in turn would help unlock the full value of flexibility.
Operational standardisation is the mantra of the Open Networks programme for 2024
From aligned flex products to a common settlement process and dispatch API specifications, the Open Networks highlights standardisation across the board by April 2024.
This standardisation aims to achieve a better user experience across the country, while making connecting to the networks easier for everyone.
Alongside this, work will continue around developing the Primacy rules. These will limit conflict across flex markets and harmonise data sharing between DNOs and the ES.
This approach recognises that what we standardise needs to be carefully selected. The DSO flexibility products have already started to transition towards a more adaptable form of standardisation, for example.
This change recognises that each system operator has very individual requirements according to their local circumstances. The standardisation of systems integrations and messages between participants will therefore benefit this evolving nature of the flexibility ecosystem.
All of this planned activity and standardisation at specific points in the network will increase efficiencies across the network – while allowing DNOs the freedom to continue choosing the right vendors and solutions for each location.
A DESNZ study to address distribution level challenges in flex markets
The “Flex Markets Unlocked” innovation programme with the Department of Energy Security and Net Zero will address the unique sets of challenges for system operators at national distribution level in the UK.
These operators need different organisations to build software tools that meet their individual challenges and present solutions, rather than depending on a monolithic platform. You can read more about this concept in our three pillars blog series.
On the other hand, flexibility providers are faced with different systems. This can make it quite confusing and create barriers to participation.
This new programme’s solution allows an ecosystem of tools to exist per system operator at national and distribution level. These tools include portals for registration and different flex market platforms.
The protocols and standards built in the project will help coordinate these elements to enable participation from a variety of different provider types. Everyone will have a more unified view. That will break down barriers to entry and ensure flex volumes can grow as demand for flex increases.
You can read more about the project in our press release.
Trials for a new market design to be launched through BiTraDER
The first trial BiTraDER market will start in the ENWL licence area in 2024. BiTraDER is an integrative market design, which allows connected customers to trade their curtailment obligation bilaterally.
Electron’s involvement in the project aims to create a new standard for flex market trading. That means a high level of integration between market platforms and services, so two-way data flows can drive grid optimisation.
This further feeds into the open ecosystem concept mentioned above, helping system operators access the right digital solutions at each step in their workflow.
Read more about the goal of BiTraDER in our blog.
Flex tech solutions to be strengthened through customer service
Energy flexibility is becoming part of the mainstream. The industry now needs to consider how to unlock the value of low carbon flexibility at scale. That means lowering barriers to entry and making the experience as simple and easy to use as possible, for everybody: from providers of flex to the operators of the network.
Technology plays a strong part in that, and that’s where our flexibility market platform, ElectronConnect, comes in. But, as with any tech solution, it needs to be married with excellent customer service. Electron partnered with Correla at the end of 2023 to provide that service.
Correla is already running and supporting some critical energy infrastructure applications today in Great Britain. Our partnership will bring that service to local flexibility markets through our platform.
It will give Electron more resources to help support our customers through implementation in the UK and Europe. It will also help provide a better experience to flexibility providers, ensuring they can easily offer their flex services into the market.
Electron closed its Series A funding round in 2023. Low carbon flexibility and a market-based approach are critical to unlocking the energy transition. Flex market platforms are one of the fastest and cheapest paths to get there.
This funding will therefore allow Electron to use all the experience in the team and the product to help that to make that happen in the UK, but also to move into select new countries in Europe and the US in 2024.
