ESO’s Demand Flexibility Service Launches

• Ofgem, the regulator for the energy industry, has today approved the ESO’s proposal to create a demand flexibility service for this winter
• The Demand Flexibility Service will allow businesses and the public to be paid for the first time to reduce/move their electricity use out of peak hours following a signal from the ESO
• For a consumer that could mean a typical household could save approximately £100, and industrial and commercial businesses with larger energy usage could save multiples of this

Ofgem has today granted approval to the ESO’s Demand Flexibility Service to run from 3rd November 2022 to 31 March 2023.

This means that electricity suppliers and aggregators (providers) can now formally join the service by signing their commercial contracts and can work with their customers to ensure the highest levels of engagement and participation.

In the coming days the ESO will look to run the first demonstration events for this service, with those providers that have ensured they are ready and able to participate from the first day of this service. Ofgem have confirmed that these demonstration events will include a guaranteed acceptance price for the providers that participate, set at £3,000/MWh (£3/KWh).

Further details on how these demonstration events have performed will be made public following delivery.

The ESO encourages providers who have not yet made appropriate preparations to join this service to do so as soon as possible , to ensure that their customers are able to benefit from participating in the full suite of demonstration events they could be eligible for.

Fintan Slye, Executive Director of the ESO, said:

“We are delighted that Ofgem has approved the use of our Demand Flexibility Service this winter. It will help mitigate the potential risks that the ESO has outlined in its Winter Outlook and will allow consumers to see a financial return for reducing their electricity use at peak times.

“As a responsible operator of the electricity system we have developed this innovative Demand Flexibility Service to compliment the robust set of tools we already use to balance the electricity system every day.”