National Grid DSO announces two-year action plan and expansion of revenue stacking for flexibility services

We have today launched a two-year strategic action plan for our Distribution System Operator (DSO) at a flagship event held in London’s historic Battersea Power Station.

The action plan has been designed following feedback from more than 200 stakeholders as part of our ‘Energy Futures’ event series, and sets out how the DSO will deliver on commitments made in its 2023 Charter; including governance, flexibility markets, and network planning.

In its first year of full functional separation our DSO has delivered:

• 10 GW of additional capacity through initiatives including ‘Technical Limits’, which has accelerated offers for connections by up to 5 years
• 70,000 flexibility assets registered on the industry-leading ‘Market Gateway’ platform, launched in July 2023
• £80m of network investment deferred through procurement of over 17 GWh of flexibility services
• Connected 374 MW of generation, including 11,305 heat pumps and more than 52,000 domestic electric vehicle chargers

Over the course of 2024, the DSO will introduce short-term local forecasting using weather data to feed into flexibility dispatch decisions and curtailment modelling and seek to widen the scope of its innovative PRIDE (Planning Regional Infrastructure in a Digital Environment) project to provide digital support to more local authorities preparing Local Area Energy Plans.

It will also begin publishing weekly dispatch data, digitalise its trading function, introduce day-ahead flexibility competitions and expand revenue stacking - building on the company’s recent ‘Revenue Stacking for Flexibility’ report produced with Cornwall Insight.

That report highlighted the potential benefits of ‘jumpability’ – where a flexibility asset could operate in multiple markets to offer services at different times depending on network need – and ‘co-deliverability’ – where an asset could offer multiple services to different markets at the same time.

We particularly welcome the commitment made by National Grid ESO that any future iteration of its Demand Flexibility Service will involve review and probable removal of the exclusivity clause that currently limits opportunities for providers and limits the potential size of the market for distribution network flexibility services.

The ‘flexibility first’ approach being taken by the DSO will maximise the use of existing network capacity before recommending investment in reinforcement – which will reduce cost to consumers and enable faster decarbonisation through accelerated connections.

Ben Godfrey (Director, Distribution System Operator, National Grid Electricity Distribution), said:

“We’ve already delivered many tangible outcomes for our customers and i’m truly excited by the future evolution of our DSO and the benefits we can create by enabling decarbonisation in our communities.

“We’re in full support of the ESO’s plan to remove exclusivity arrangements from its Demand Flexibility Service and would like to see this change made as soon as is practical so we can expand our ‘flexibility first’ approach to decarbonising the electricity distribution network as efficiently as possible”