The levels of local flexibility contracted by Britain’s electricity distribution network operators (DNOs) in the first seven months of 2021 are already 38 per cent higher than the total for the whole of last year.
New figures from the Energy Networks Association (ENA) show 1.6GW has been contracted so far this year, compared to over 1.1GW for 2020. In 2019, just 256MW of flexibility was secured, with 116MW in 2018.
Just under 2.9GW of flexibility has been tendered for so far in 2021, compared to 2.1GW last year. The ENA pointed to a nearly 40 per cent increase in market liquidity in the past two years, with 56.5 per cent of 2020 tenders being contracted. In the year to date the figure is 55.7 per cent.
The rapid increase in flexibility is likely to continue with several DNOs announcing record tenders. In April, Utility Week revealed that SP Energy Networks would launch a tender aimed at procuring 1.4GW of flexibility.
In May, UK Power Networks announced it had procured 350MW of capacity in its latest tender, awarding contracts worth £30 million to 17 providers.
However, last month Northern Powergrid’s then director of policy and markets Patrick Erwin suggested some networks were “overpaying” for flexibility and in some cases procuring “flexibility they don’t really need”.
The ENA pointed out that flexibility services have so far tended to focus on the industrial and commercial sectors, and that the next big step was to unlock the potential of residential flexibility.
Randolph Brazier, director of innovation and electricity systems at the ENA, said: “Local flexibility services are a relatively new market but one that has seen an incredible growth over the past three years alone in Britain. Breaking the previous record for flexibility after only seven months of this year is great news for customers and great news for net zero.
“However, there is still plenty of room for growth and we are not resting on our laurels; networks, Ofgem and government are working together to increase the amount of flexibility in the energy system of the future, and we very much welcomed the release of the latest version of the Smart Systems and Flexibility Plan. With Northern Ireland also joining the fold with local DSO flexibility trials, it looks like this market will soon expand to the whole of the UK.
“This is only the tip of the iceberg. The UK has some of the world’s most ambitious decarbonisation targets and Open Networks is helping to pave the way through flexibility to bring on more low carbon technologies. We’re continuing to power forward, further and faster – in line with government’s ten point plan and Climate Change Committee targets – to make sure that customers across the country can see the benefits that smarter, more flexible energy networks can bring.”
The latest figures have been published alongside the launch of a consultation on flexibility, which runs until 24 September. ENA’s Open Networks project team are welcoming responses from the energy industry and beyond on how the project can further drive standardisation in local energy markets across the country.