In this blog, Peter Stanley, CEO of Elexon, explains the importance of flexibility in achieving a clean energy system, and how Elexon will help facilitate this in its role as a market facilitator.
To achieve Clean Energy 2030, energy markets must become more accessible and effective and stimulate greater competition, innovation, growth and investment.
If we want to achieve this goal, flexibility must play a much larger role in the energy system. We need to rapidly increase the amount of flexible assets participating in the wholesale, ancillary services, balancing mechanisms and local flexibility markets.
We also need to make it much easier for asset owners to compete in these markets, through clear market design, transparency of information and revenue stacking capabilities (where owners can see that a single flexibility asset can deliver multiple products in markets).
Having the right digital infrastructure to support flexibility markets is also crucial. Registering assets to participate should be much easier, supported by digital infrastructure and reliable data exchange. Coordinated by government, Ofgem and the sector as a whole are needed to promote the provision of flexibility to consumers so that much greater volumes of it are available for trading in these markets.
In December 2025, Elexon will start as a market facilitator and our task will be to coordinate more than twenty emerging local and national flexibility markets. There’s a real sense of momentum building around flexibility. In 2024, 9GW of flexibility capacity was contracted, almost doubling compared to the previous year. To put that into perspective, it is more than twice the total capacity of the new Hinkley Point C power station. To capitalize on this momentum, Alexon must make a big impact in filling the role and work quickly.
Our strategic delivery plan
The scope for the first delivery period (January 2026 to March 31, 2028) includes all distribution system operator flexibility services and most of the National Energy System Operator (NESO) support services (except stability and reactive power). We will also discuss NESO’s procurement of services in the Balancing Mechanism (but not its operation).
We consulted with flexibility stakeholders on a strategic implementation plan for the first period that covers the four key objectives (explained below). Our plan is supported by flexibility market rules that system operators must comply with, thirteen of which we consulted earlier this year. We will publish the final versions of the delivery plan and rules before filling the role.
1. Ensuring frictionless market access
Flexibility providers often face barriers to registering assets as the process varies from market to market. It reduces their interest in offering services, especially if they are smaller companies. We have already started working with the industry on the key tool to solve this – the Flexibility Market Asset Register – and in our contribution we state that the register will go live in July 2027. It will provide a much smoother process for participants to register assets and system administrators will also have a much clearer view of those assets. Ultimately it will be the ‘single source of truth’ for asset registration. Supporting work also includes a market data portal and more aligned data.
2. Align market forces
Participants have an inconsistent experience when participating in different flexibility markets. For example, the types of services they need to provide and the duration for which these services are needed vary from market to market. This creates friction and makes it difficult for asset owners to be assured of income generation opportunities.
We will need to ensure that the markets are better aligned so that all users have a fair and consistent experience. One of the key ways we will solve this is by deploying a common shipping API among distribution system operators by 2027. It will provide a simple, standardized method that system administrators can use to issue shipping instructions to flexibility service providers.
3. Developing robust definitions of markets
It is clear from our conversations with flexibility providers that they would find it easier to compete and invest in providing capacity in multiple markets if the definitions of the services system operators need were clearer, more consistent and more comparable. One of the solutions to this will be for Elexon and the participants to standardize the definitions of flexibility markets and products to promote transparency and comparability. We plan to implement measures to achieve this by summer 2027.
4. Improving revenue stacking and coordination arrangements across markets
A persistent problem that providers face is that they do not see any clear possibilities for ‘stacking’. This is critical to the business case for developing new assets. Our delivery plan includes various workflows to further support stacking. They include implementing a clear ‘capacity release’ approach by late-mid 2027, with asset owners making unused capacity available to address supply and demand constraints. A clear approach will help providers ‘service hopping’, using the same resource to offer different flexibility services in markets at adjacent times. We expect the approach to be supported by the use of a capacity release signal provided by the dispatch API.
With a pragmatic and agile approach
Elexon will act as a catalyst for flexibility markets while being pragmatic about what we can achieve in the initial delivery plan period. Flexibility stakeholders have made it clear to us that it will be a challenge to implement many changes in a short time. Therefore, our plan proposes to focus on a smaller number of critical issues.
Flexibility markets evolve quickly and participants’ needs can change quickly. New policies and technologies can also force us to quickly rethink our priorities. We will therefore need to maintain a flexible approach, both in terms of implementation and management of the Flexibility Market Rules.
Collaboration is one of our strengths
One of the reasons why Ofgem has appointed Elexon to fill this role is our excellent reputation for working collaboratively. During the setup phase of the role we worked closely with the participants to understand their needs. We will continue to work closely with them, ensuring we do not overburden participants with requests for involvement.
Measuring success
We will report to Ofgem on our overall performance and we have developed a range of ways to measure success. They include key performance indicators for each of the thirteen rules, such as measuring the purchased volume for the standard flexibility products that providers offer.
Success will also depend on whether flexibility markets deliver better results, with the main influencing factor being whether there is a higher level of liquidity in flexibility overall.
The role that Elexon plays in the sector is expanding
The task of the market facilitator is to create the right environment for more liquid flexibility markets. The other side of the story is that consumers need to offer much more flexibility than they currently do.
Across the sector, and together with the government and Ofgem, we will need to ensure that the customer journey for providing flexibility is simple, attractive and rewarding. Elexon can play an important role in this by helping consumers offer flexibility.
By implementing half-hourly billing, we help suppliers and other companies develop new rates and products that make flexibility easier and more attractive. To support this, we will provide more detailed consumption data to the sector from the end of 2026.
The government has proposed that from mid-2026, Elexon will provide industry-led management of cyber and interoperability standards for the energy-smart devices consumers use to provide flexibility.
If the government confirms that we will fulfill this role, it will allow us to align the security and interoperability standards of these technologies and services to support the development of flexibility markets as a market enabler.
In its advice to the government, the National Energy System Manager said achieving a fivefold increase in consumer-led flexibility is one of the most complex and challenging targets that must be met to achieve clean energy targets. Through market facilitation and implementing breakthrough reforms, we look forward to providing the leadership the industry needs to support that flexibility goal.
