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Distribution Flexibility Services Procurement Statement and Report

In line with the Clean Energy for all Europeans Package introduced by UK Government in December 2020, Ofgem added a new condition to our Electricity Distribution Licence. Condition 31E: Procurement and use of distribution flexibility services sets out Distribution Network Operator (DNO) plans for procuring flexibility services for the upcoming regulatory year. This statement outlines our plans for procuring flexibility services for the upcoming regulatory year and reflects our approach for supporting the flexibility market in Great Britain as we cooperate with other DNOs to deliver simplicity, accessibility and transparency throughout our processes in this fast-developing sector. The Procurement Report details the outcomes of the services procured and dispatched in the previous regulatory year. 

Flexibility Strategy

Flexibility plays a crucial role in daily network balancing, achieved through collaboration with stakeholders and utilisation of our network assets. In recent years, we have worked diligently to establish systems that foster an inclusive and efficient flexibility marketplace. This enables us to manage our network cost-effectively, ensuring value for consumers and helping us deliver our social DSO ambitions.

This strategy outlines our achievements to date on our flexibility journey, informed by your needs, and invites you to participate in shaping our future initiatives.

Regional Variation in the Uptake of Flexibility Services

The report has been prepared by WSP, in collaboration with SP Electricity North West and Northern Powergrid to investigate whether there are regional differences in the uptake of flexibility services across Great Britain.

If you're new to the flexibility services market, these guidance documents might help in understanding the benefits, flexibility products (responses), technical requirements and process of providing flexibility to the network. 

We currently utilise V3.2 of the Energy Networks Association (ENA) Flexibility Services Standard Agreement for our tenders, as utilised by all UK DNOs. Potential providers are encouraged to read and accept the terms and conditions of this agreement via ElectronConnect before the bidding window opens in each tender round.

To view our latest tender documents including our Invitation to Tender (ITT), appendices and helpful tools please visit our Latest Requirements webpage. These include:

Our cost calculator video user guide provides a step-by-step guide on how to use the cost calculator correctly before placing a bid.

Since January 2022, we have been utilising the industry standard Common Evaluation Methodology (CEM) & Tool to determine the most suitable solution to meet network needs, comparing traditional asset reinforcement to procuring flexibility services, energy efficiency measures and active network management (ANM) solutions.

The CEM tool evaluates solution options comparing network capacity and network losses over the range of DFES scenarios to identify the most cost-effective solution and proposes optimum contract length. This standardised industry approach provides greater visibility and confidence amongst flexibility providers and helps stimulate volumes and competition in the market, ultimately reducing costs for network customers.

To demonstrate our commitment to procuring flexibility in an open and transparent manner, we will publish a high level summary table on our Latest Requirements page following each tender round, along with a more detailed analysis of the valuations for each requirement zone. An archive of our previous tenders is available to view on our Previous Requirements page.

Our current flexibility service processes and how we develop our tenders is a work in progress. We have considered and incorporated the customer and stakeholder feedback we have received to date, but there are still areas where we need your input.

2023 Consultation

We led this consultation over the summer period to engage with our stakeholders to collaboratively shape our priorities and approach with a key focus on data sharing, engagement, technical requirements and contracting, to ensure we continue demonstrating accessibility and simplicity throughout our flexibility processes ahead of our autumn tender. This consultation closed for responses on 15 September 2023.

2022 Consultation

As part of our 2022 Distribution Flexibility Procurement Statement we committed to leading a consultation to better understand our stakeholders' views of our approach to procuring flexibility services, how we engage with our customers and our future proposals.