ESO commits to support Elexon as Market Facilitator

After a period of consultation with industry, Ofgem has asked Elexon to take on the Market Facilitator role to align and further develop local and national flexibility markets in the GB electricity system.

In their decision, the regulator recognised our organisational expertise and experience in flexibility market design and set out their view that we are well positioned to take a leadership role on flexibility in the energy sector. 

The ESO will continue to play a major role in leading the development of national electricity markets and flexibility as it transitions to become NESO. We have been tasked by the Government to provide advice on the pathway towards its 2030 ambition and as NESO will support this goal by delivering a network roadmap to net-zero as the Regional Energy Strategic Planner, as NESO we also expect to be commissioned to deliver the Strategic Spatial Energy Plan (SSEP).

This autumn, we will be launching our Flexibility Market Strategy, to set out our plans to increase competition in flexibility markets and working with industry stakeholders to implement a coordinated approach to market development. 

Our vision is to enable all flexibility resources to move seamlessly between markets, driven by effective market signals, delivering value to consumers; we remain committed to driving and delivering market change. 

On flexibility more widely, ESO is working in several areas to provide leadership across industry and grow this important space which will be crucial for achieving net zero and running a clean system. 

We are evolving our Demand Flexibility Service, which has seen over 2.6 million households and businesses participate over the last two winters to reduce their electricity use at peak times and get paid to do so. Later this year we will re-launch the service with an expanded remit to operate across the entire year and enable consumers to also participate in local flexibility markets, ensuring they can be rewarded for using their electricity flexibly across all seasons.

Elsewhere we continue to learn from the success of our PowerLoop trial, which has been instrumental in enabling Electric Vehicles to participate directly in the balancing of electricity at a national level of the first time.

Significant growth in distributed flexibility will be fundamental in delivering a decarbonised electricity system and ensuring clean and affordable energy for all. 

To deliver this goal, greater alignment is needed between local and national markets and services to make this a reality. We look forward to supporting and working collaboratively with Elexon in their new role. 

Alongside existing flexibility champions across the ENA Open Networks programme and DNOs, we will share our expertise and knowledge, to support both Ofgem and Elexon as they start to develop the final design of this new role, via industry engagement this summer. This will be crucial to ensure the Market Facilitator can hit the ground running and work cohesively with Distribution Network Operators and with the ESO as it transitions to become NESO.