Proposed licence conditions to support the operation of the market facilitator

The market facilitator is a new role, to be delivered by Elexon, with a mandate to standardise local flexibility markets and align with national flexibility markets. The market facilitator is due to be fully operational by the end of 2025. 

We are introducing new licence conditions to the Standard Conditions of the Electricity Distribution Licence and the Electricity System Operator (ESO) Licence. These will require Distribution Network Operators (DNOs) and National Energy System Operator (NESO) to comply with Flexibility Market Rules that will be owned and developed collaboratively by the market facilitator through working groups and consultations. Licensees will also be required to provide data and information as reasonably required by the market facilitator to demonstrate their compliance with the Flexibility Market Rules. 

We are also proposing to introduce licence condition clauses to the ESO Licence relating to how the market facilitator inputs into service design (for services in scope) and works with NESO, recognising that there are already established processes for amending existing and introducing new services. 

This is a non-statutory consultation on whether the proposed licence conditions deliver the policy intent that has been developed in previous publications. We welcome feedback from licensees and other interested parties, including flexibility service providers. 

We intend to publish a statutory consultation in September 2025, followed by a decision in December 2025.