Market Opportunities
Introduction
As the energy landscape evolves, market opportunities for Flexibility Service Providers (FSPs) are expanding. Understanding and accessing these opportunities can significantly enhance the value of your flexible assets and optimise market participation.
Changes in Energy Networks
Decarbonisation, decentralisation, and digitisation are significantly transforming our energy networks. As a result, Distribution Network Operators (DNOs) are transitioning into Distribution System Operators (DSOs). This shift marks a move from primarily focusing on physical infrastructure maintenance to becoming active managers of energy systems.
Distribution System Operators
DSOs are increasingly utilising advanced tools to manage energy networks more efficiently. Instead of just reinforcing or upgrading infrastructure, they are creating smart, flexible energy systems. Flexibility is becoming a crucial component for DSOs, enhancing the use of existing infrastructure and offering new opportunities for customers to engage and generate revenue.
Regional Market Overviews
United Kingdom
The UK offers a well-established framework for flexibility services, with the National Grid ESO and various Distribution Network Operators (DNOs) facilitating local and national flexibility markets. The UK’s flexibility market includes mechanisms such as the Capacity Market, Balancing Services, and the recently introduced Local Constraint Market. Piclo Max aspires to make all energy markets accessible through a single platform, providing seamless access and integration for Flexibility Service Providers.
See current opportunities via Piclo Max
Australia
Australian Distribution Networks face unique challenges, including extreme weather events and bushfires, along with the integration of a high number of decentralised renewable energy sources like rooftop solar and home batteries. They aslo cover a wide range of geographical areas, from densely populated cities to remote rural communities .
As the distribution networks contend with these challenges and try to meet the evolving energy demands of their customers, flexibility markets are playing an increasingly vital role in ensuring reliable and efficient networks.
See current opportunities in Australia
What is Flexibility?
Defined by Ofgem, flexibility involves modifying generation or consumption patterns in response to external signals (like price changes) to provide services within the energy system. Flexibility services are particularly location specific and are crucial for managing low voltage networks.
When are Flexibility Services Needed?
Flexibility services are often required during specific times when there is a high demand but low generation, such as winter evenings from 17:00-19:00. These services help address constraints in the energy system caused by such imbalances.
Requirements for Providing Flexibility Services
To offer flexibility services for a DSO, an asset needs to be:
- Located in an area with energy system constraints.
- Connected at the appropriate level to the grid.
- Suitable in size and capability to provide the required type of flexibility service.
Types of Flexibility Products DSOs Use
In the UK, standardisation efforts have been made to the types of flexibility products that DSOs are seeking to procure, so that there is consistency across them all. These are peak generation, scheduled utilisation, operational utilisation, operational utilisation + scheduled availability, and operational utilisation + variable availability.
For a detailed overview of these standardised flexibility products, you can access the document from the Energy Networks Association here: Flexibility Products Alignment.
Whilst flexibility markets are emerging in new regions hosted on Piclo, such as Italy, Portugal, the USA, and Australia, the flexibility products offered may differ.