Innovation Annual Summary

Demand Flexibility Service approved for 2023/24 winter

  • Energy regulator Ofgem has today approved the updated terms of our Demand Flexibility Service, and the service will be available from Monday 30 October.
  • Households and businesses can participate via registered service providers, and earn pounds, points or prizes across the winter period by shifting their energy usage outside of specified periods - helping with the cost of living and energy bills.
  • The Demand Flexibility Service first launched last winter and saw 1.6 million households and businesses take part, saving over 3,300MWh of electricity. 

Energy regulator Ofgem has today granted approval to our Demand Flexibility Service (DFS) which will be available from 30 October 2023. 

DFS incentivises households with smart meters, as well as industrial and commercial users, to voluntarily flex the time they use their electricity to help manage the system this winter during periods where margins are tightest. 

End-consumers that are interested in participating in the service can do so through a number of parties. Last winter, we had 31 registered service providers. A list of this years Registered Service Providers will be published on our website in due course, and updated throughout winter.  

Last winter, DFS successfully saved over 3,300MWh across 22 events, enough to power nearly 10 million homes. This year, we're committed to developing the service even further and are keen for more consumers and businesses, large and small, to take advantage of this opportunity to reduce their energy bills and carbon footprint.

Alongside potential live uses of the service to balance the network this winter, we will endeavour to run 12 test events that consumers can participate in. Electricity suppliers, aggregators and businesses who directly contract with us will receive a guaranteed acceptance price of £3/kWh for at least six of the test events.

The tests will begin in November as DFS delivers for its second year. Further details on how test events have performed will be made public following delivery. 

As set out our Winter Outlook for 2023/24, the broad European energy situation has improved since last year, and margins forecast to be slightly higher than last year, broadly in line with recent winters. If needed, the DFS ‘live events’ will incentivise customers to reduce electricity consumption at periods when margins are tightest.

Claire Dykta, Head of Markets at the ESO, said:

“The ESO is delighted that Ofgem has formally approved the return of our Demand Flexibility Service this winter. Households and businesses across Great Britain can now benefit from actively participating in helping balance the network during tight winter periods and be incentivised to do so.

“Creating more flexibility on our electricity system will be vital for running the clean, green and fair energy system of the future.

“Last winter’s service was a first of its kind for Great Britain, with millions of consumers and businesses actively participating in demand-side energy system flexibility at scale, and the response from industry and the public has been incredibly positive.

“The service compliments the robust set of tools the ESO already uses to balance the electricity system every day.”

Demand Flexibility Service