Author: Shane Touhey, Commercial Analyst, Electron
I’ve talked before about the process of becoming a flexibility service provider (FSP), and what you should consider when thinking about participating in flexibility. Now, let’s take a look at some of the eligibility criteria that you may be required to meet to provide flexibility services in Great Britain – and to have the chance to increase your revenue whilst supporting the clean energy transition.
What’s a flexibility service provider (FSP)?
First, a quick definition. A flexibility service provider is an aggregator or owner of Distributed Energy Resources (DERs) that can offer flexibility as a service to the grid.
This means offering the ability to turn up or turn down the consumption or generation of electricity at a specific time or location.
What type of energy resource can participate in flexibility markets?
Any type of DER can participate in flexibility markets – as long as those energy assets meet certain eligibility criteria, as outlined in the following sections.
Common types of DER include:
- Electric vehicles (EVs)
- Battery storage
- Heat pumps
- “Flex site demand” or flexible industrial energy consumption
- Solar photovoltaic panels
- Wind generation
- Hydropower or hydroelectric
- Etc
What steps will you have to complete to confirm your eligibility to participate in flex markets?
Once you’ve registered on the market platform chosen by your local system operator, you’ll need to complete two steps before you can submit offers during the bidding round: commercial and technical qualification.
The first ensures that your business meets the relevant criteria, while the second ensures that your assets are eligible.
What commercial criteria will you need to meet to provide flexibility services?
To commercially qualify your business, you’ll first need to submit details of your company’s financial status, confirm the company’s registration details, and supply key documentation around policies, financial reporting, and insurance.
The system operator will then review your submission and carry out credit checks.
These checks help mitigate any reputational risk – or risk to supply.
Normally, commercial qualification is the first deadline you’ll need to hit before you can register your assets on the market platform.
What technical criteria will your assets need to meet to offer into markets?
Once you’ve completed commercial qualification, you’ll be able to register your assets. The system operator or market platform will then technically qualify your assets for:
- Location: Are your assets located in the relevant region where the market operates?
- Capacity: Do your assets meet the minimum capacity requirements to bid in markets? This is normally 1MW, but varies from region to region. UK Power Networks, for example, requires 10kW capacity per location. Smaller DER owners can choose to join a third-party aggregator or a virtual power plant (VPP) to ensure they meet this minimum requirement.
- Operating parameters: Do your assets meet grid requirements for being within normal operating parameters? This includes response time, minimum and maximum operating duration, and recovery time.
What type of flexibility products and services could you offer?
Once qualified, you’ll be ready to bid into markets. There are then different flexibility products that your network operator may seek to procure.
The original four flexibility products defined by the Energy Networks Association
The Open Networks project, led by the Energy Networks Association (ENA), previously established four flexibility products. These products aimed to define what a “flexibility service” is.
The four products can cover turn up or turn down of generation or demand:
- Sustain: This is a product scheduled in advance, asking an asset to adjust their demand over a defined period.
- Secure: A pre-fault product, dispatched a day or week in advance when the system operator predicts a strain on the grid.
- Dynamic: This real-time product is rarely needed, but can call on assets with short notice to respond to any network abnormalities or outages.
- Restore: A post-fault product, dispatched after an unexpected loss of supply to short time scales.
The new flexibility products defined by the ENA
The ENA has since amended and expanded on those flexibility products. The new products take into account more asset capabilities and localised deviation in use to help promote liquidity in markets.
The new products that your system operators can choose to request now include:
- Peak reduction: This can manage peaks in demand, reducing those peaks over time with long-term energy efficiency.
- Scheduled utilisation: This is when the time of delivery of the flex service is agreed in advance – so that assets that prefer to run to longer timescales can benefit.
- Operational utilisation: This is when the amount of flex is agreed, but close to real time once the actual network data is known, to ensure the accuracy of the amount of flexible capacity paid for.
- Operational utilisation and scheduled availability: This allows the system operator to buy flexibility ahead of time following a network abnormality. Availability is defined at the point of purchase, but delivery and payment can vary based on the actual needs of the network.
- Operational utilisation and variable availability: This allows the system operator to procure a level of contracted capacity, then refine the availability requirements and payment based on actual network data closer to the event.
If you’d like to provide flexibility services, you can read more specific information on your local distribution system or network operator’s website – or find more information in our resource hub for flexibility providers.
