Electricity system flexibility

Being flexible with how and when we consume and produce energy means we can make sure the power generated and delivered to us always matches the amount we use.

We have just published our joint Plan with Government. This is a culmination of work over the past couple of years. 

As the energy regulator for GB, we want to make sure that the rules governing how electricity is bought and delivered will allow consumers and industry to draw as much benefit as they can from network flexibility.

We define flexibility as ‘modifying generation and/or consumption patterns in reaction to an external signal (such as a change in price) to provide a service within the energy system’.

To date, the energy industry has typically provided flexibility on the ‘supply-side’. For example, to make sure supply always matches demand, electricity power stations have changed how much they produce. Network operators have also built enough cables to make sure electricity can always be transported to consumers. But our energy system is changing, and continuing to rely on supply-side solutions alone would be expensive. New ways of providing flexibility are emerging. They can help us deliver against our carbon commitments, while providing reliable and secure supply at minimum cost.

New flexibility methods

Demand-side response: Consumers (the ‘demand-side’) can sign up to special tariffs and schemes which reward them for changing how and when they use electricity (known as ‘demand-side response’). Smart meters and other technologies will make this easier than ever for domestic consumers. DSR is an important part of our vision for a flexible energy system. You can access our publications on DSR below.

Energy storage: We can use batteries or other forms of storage to store energy when it is plentiful, or when there is too much for network cables to carry. This energy can then be used at a time when it’s needed.

Distributed generation: We can use low carbon electricity we generate locally at home or at work, such as from a rooftop solar panel, to help reduce the costs of transporting it and save money on bills.

Doing more of all these things could help us to integrate more sustainable energy sources, like wind-power, into our supply system.

We’re looking at how current rules and regulations may prevent consumers and other system users, both old and new, from doing so.

Our work

We are prioritising a number of work areas to ensure that rules and regulations support an efficient, flexible energy system. See our position paper to find out how flexibility benefits consumers and other system users, both old and new.

Specifically, we are working to facilitate new roles for industry parties by: 

  • exploring how to support more large industrial and commercial customers to participate in providing flexibility 
  • encouraging distribution network operators to make more efficient use of new technologies, providers and solutions as part of their evolution to Distribution System Operators. DSOs, TOs and the SO must also need to work together much more to deliver the best outcome for the system as a whole. 

We are working to remove barriers for new business models by clarifying:

  • the role of aggregators in markets.
  • the legal and commercial status of storage.

Outputs can be found in the publications and updates list below. Our workstreams also contribute to a wider portfolio of related work in Ofgem, looking at issues related to the future development of the energy network. 

Need help?

For further information on our work within energy network flexibility,  to share thoughts or comments, or register interest for an individual workstream, please email flexibility@ofgem.gov.uk

Publications and updates

  • Published: 20th Dec 2018
  • Decisions
  • 3 Associated documents
We are publishing our decision on the statutory changes to the electricity distribution licence conditions to clarify that distribution licensees must ensure there is separation of operation of generation assets from the licensee’s activities. We are...

  • Published: 17th Dec 2018
  • Closed: 11th Feb 2019
  • Consultations and responses
  • 2 Associated documents
We are consulting on proposed licence conditions and accompanying guidance to clarify electricity network operators’ expectations in their role in supporting an efficient, coordinated and economical whole system.

  • Published: 16th Oct 2018
  • Closed: 14th Jan 2019
  • Consultations and responses
  • 1 Associated documents
Progress update against the actions in the Smart Systems and Flexibility Plan. This update sets out Ofgem and Government’s forward priorities in this area.

  • Published: 28th Sep 2018
  • Closed: 27th Oct 2018
  • Consultations and responses
  • 5 Associated documents
Consultation on statutory changes to the electricity distribution licence regarding separation of operation of generation assets.

  • Published: 30th Nov 2017
  • Agendas, minutes and presentations
  • 2 Associated documents
The Smart Systems Forum has been created to help implement and steer BEIS and Ofgem’s Smart Systems & Flexibility Plan.

  • Published: 2nd Oct 2017
  • Closed: 27th Nov 2017
  • Consultations and responses
  • 3 Associated documents
We are consulting on modifying the electricity generation licence to provide regulatory clarity on the treatment of electricity storage.

  • Published: 2nd Oct 2017
  • Closed: 27th Nov 2017
  • Consultations and responses
  • 37 Associated documents
Consultation on potential changes to the electricity distribution licence to ensure separate operation of storage.

  • Published: 24th Jul 2017
  • Guidance
  • 2 Associated documents
We set out our views on the design of arrangements to accommodate independent aggregators in energy markets.

  • Published: 24th Jul 2017
  • Decisions
  • 2 Associated documents
Following on from our joint Ofgem-BEIS Smart Flexibility call for evidence, we set out our plan for Smart Systems and Flexibility.

  • Published: 10th Nov 2016
  • Reports and plans
  • 1 Associated documents
PA Consulting have produced a report for Ofgem on the provision of Demand Side Response services by independent Aggregators.