UK's NESO to Pay Users for Using Less Energy
LONDON - The National Electricity System Operator (NESO) in the United Kingdom has announced that the Demand Flexibility Service (DFS) will be available year-round starting Wednesday, November 27, 2024. This initiative, approved by energy regulator Ofgem, signifies a significant expansion from the previous availability of the service only during the winter months.
DFS is designed to encourage households and businesses to adjust their electricity usage during certain events, offering incentives such as cash, points, or rewards. Participants can register through registered service providers, including energy suppliers and aggregators.
Over the past two years, more than 2.6 million organizations have participated in DFS, resulting in over 7,000 MWh of electricity savings. The expanded service aims to potentially alleviate demand on the electricity grid year-round by providing consumers and businesses with more engagement opportunities.
The adaptation of NESO's DFS rules allows the service to compete directly with electricity generators, including gas plants and wind farms. This represents a strategic move to enhance the role of demand flexibility through integration into the broader electricity market.
The expansion of the service also includes interoperability with other markets, such as regional services offered by the Capacity Market and Distribution Network Operators. This compatibility aims to provide participants with a broader range of options and incentives.
Pre-registration for the year-round DFS opens today, with NESO designating energy suppliers and other third parties as registered service providers.
NESO plans to publish a response in December to the summer call for evidence on flexibility and the Market Access Routes review for demand-side flexibility. This forthcoming document, developed in collaboration with DESNZ, Ofgem, and industry partners, is expected to outline strategies for ensuring fair market access for all types of demand flexibility.
Rebecca Beresford, NESO's Director of Markets, commented on the expansion, emphasizing the organization's excitement regarding the evolution of DFS. She highlighted the importance of offering consumers and businesses the ability to participate in the electricity market year-round.
This announcement reflects NESO's commitment to enhancing demand flexibility as part of a cleaner energy system.