NESO announces changes to support energy flexing
The National Energy System Operator (NESO) has unveiled changes to metering rules, paving the way for millions of UK homes and businesses to benefit from greater flexibility in how and when they use electricity. The changes will enable consumers with electric vehicle (EV) chargers, heat pumps or batteries to participate more easily in flexibility markets, gaining access to financial benefits such as lower tariffs and bill credits via energy suppliers or third-party aggregators.
Under previous rules, households would have required specialist meters to participate- these devices are highly accurate but expensive, meaning participation has largely been limited to large generators such as wind farms. Following an independent review and successful evidence-based trials with Octopus Energy, EV Energy and Pod Point, it was found that standard domestic EV chargers, heat pumps and batteries can participate in supporting the grid’s Balancing Mechanism using their existing technology. Opening participation in the Balancing Mechanism to households and businesses is expected to enable a more flexible and sophisticated electricity network, helping to reduce balancing costs, boost affordability, and drive clean economic growth across Britain.
Fintan Slye, Chief Executive of NESO, has said: “Abolishing outdated metering requirements to allow millions of households and businesses to benefit from rewards for flexing their energy use is an exciting and historic milestone in the way Britain is powered.”[i]
He explained that consumers would be able to play an active role in supporting sustainability from the comfort of their own home or workplace. Further, it means that NESO will be able to utilise aggregated assets instead of switching on more expensive power stations, reducing costs and helping the UK move to clean power by 2030.
“This is a critical step towards building a more decentralised, digital, and flexible system, capable of supporting Britain’s move to electrified heating and transport. We hope it will help unleash new entrants to the energy market, supercharging innovation and clean growth for Britain.”[ii] Slye adds.
Demand Flexibility
In the past, UK households and businesses have been able to provide demand side flexibility to NESO through the Demand Flexibility Service, though this typically procured small amounts of energy for the grid in advance, a handful of times a month. Under this scheme, consumers enjoyed benefits including money off bills or rewards for taking part. Britain was the first country in the world to introduce such a service, and to date it has seen roughly 2 million households sign up.
With electricity demand projected to triple by 2050 and renewable generation increasing, NESO has said that expanding flexibility will be necessary to maintain system stability and manage costs. These new changes mean that if generation is high, to avoid wasting renewable energy, an aggregator or supplier could automatically charge EVs or batteries faster with surplus energy. Likewise, they could temporarily increase heat pump temperature to prewarm a premises or home in a way that works for the consumer. Contrastingly, if national demand is high, consumers might agree to have their EV charging automatically paused or slowed down within charging parameters that work for them. Or they might opt to have their battery export small amounts of stored energy.
CEO of Energy UK, Dhara Vyas, said: “As our energy system continues to transition towards clean power, it’s important that customers can make the most of a more dynamic market. Giving households the opportunity to help balance the grid and be rewarded for it through lower bills or other benefits is a great first step.”
She added: “this change from NESO is welcome, it’ll help to ensure that households can continue to use smart products and services effectively. I look forward to continuing our work together to tackle the barriers customers face and make sure demand-side solutions can compete on a level-playing field.”[iii]
References
[iii] Ibid
