Market Opportunities

This page offers insight into DSO Flex and the opportunities within this market. 

Why are Distribution System Operators (DSOs) Procuring Flexibility?

In the UK, there are 6 Distribution Network Operators (DNOs) that own and maintain the local distribution networks:

  • Electricity North West
  • Northern Powergrid
  • SP Energy Networks
  • Scottish and Southern Electricity
  • UK Power Networks
  • Western Power Distribution

However, decarbonisation, decentralisation and digitisation is driving rapid changes to our energy networks. As a result, DNOs are evolving to becoming more active managers of their systems, with their role transitioning to become Distribution System Operators (DSOs). 

DSOs are shifting away from simply reinforcing or upgrading the physical infrastructure of the networks to using a variety of tools to create smart, flexible energy systems. Flexibility is becoming an essential tool for DSOs and offers more efficient ways of using existing infrastructure and assets connected to the networks plus new ways for customers to engage and earn revenue. 

Flexibility is defined by Ofgem as “modifying generation and/or consumption patterns in reaction to an external signal (such as a change in price) to provide a service within the energy system”. DSO flexibility services are highly locational and extend to their low voltage networks. Flexibility services could be required during a specific window of time, such as a winter evening at 17:00-19:00 when generation is low but demand is high in an area, which causes a constraint and triggers the need for flexibility. 

This means that to provide flexibility services for a DSO, an asset must be located in the area of a constraint and meet other relevant criteria such as the right connection level, asset size and have the ability to provide the type of flexibility service required. 

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 Sustain, Secure, Dynamic and Restore. 

Read further details on these flexibility products here via Energy Networks

Benefits of DSO Flexibility to Flexible Service Providers

  • Flexible service providers can optimise the use of their assets and earn additional revenue streams, with contracts extending up to 7 years providing long term income opportunities. 
  • Lower-voltage requirements enable non-traditional assets such as EVs to participate. 

Benefits of DSO flexibility to the Energy System

Flexibility is widely acknowledged as having an essential role in the Net Zero transition and provides a cost-effective alternative to physical network reinforcement. Flexibility is critical to reliable, decarbonised networks and key to unlocking capacity for new technologies such as EVs, renewables and heat pumps to connect to the grid.

DSOs can use flexibility to: 

  • ensure their network is operated within its voltage, thermal and fault level constraint limits as required in their licence conditions. For instance, constraints could be the result of lots of EVs wanting to charge at the same time, or a very sunny windy day causing the DSO to signal to batteries to import surplus renewable generation so it is not wasted or curtailed
  • manage their network in response to events such as faults or bad weather

Interested in taking part? Please see below some helpful links to assist with the next steps:

DSO Flex Market Eligibility

DSO Flex Process Overview

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