This article explains the role of distribution network and system operators (DSOs), the concept of grid or energy flexibility, and how flexibility markets benefit DSOs and flexibility service providers (FSPs) in optimising electricity distribution.
What is a distribution system operator?
A DSO is responsible for operating and developing the electricity distribution network within a specific region. The primary role of a DSO is to ensure efficient development and delivery of electricity.
In the UK, there are seven DSOs:
National Grid Electricity Distribution
UK Power Networks
Scottish and Southern Electricity Networks
SP Energy Networks
Northern PowerGrid
Electricity North West
Northern Ireland Electricity Networks
DSOs are adapting the way they operate to hit their Net Zero targets and better manage dynamic changes to energy networks. Alongside upgrading and reinforcing the grid's physical infrastructure, they now use a variety of flexible services, creating tools to enhance energy systems.
On ElectronConnect, the DSO procuring flexibility is referred to as a “Market operator”. See our glossary for more terminology clarifications.
What is flexibility?
Flexibility is the ability of prosumers, consumers, and generators to adjust their electricity usage in response to signals such as price changes, incentives, or requests from DSOs. These can be coordinated in markets through the ElectronConnect platform.
This adjustment can involve increasing or decreasing consumption or generation at specific times to help keep the network within the required limits, such as frequency and voltage.
Why do DSOs need flexibility?
Flexibility reduces the need for expensive peaking power plants, leading to cost efficiencies. DSOs are also willing to pay for flexibility because it can help them make more targeted decisions for capital investment in grid infrastructure.
How? It can help DSOs use existing infrastructure more efficiently and avoid the costs associated with building new power lines or substations.
Flexibility can also help maintain the reliability of the network by enabling energy generation and use to be refined, to help energy stay within limits – and prevent blackouts.
A further use case for flexibility is speeding up the connection of energy generators and consumers by offering non-firm (also known as flexible) connections.
How do FSPs benefit from flexibility markets?
Participating in flexibility offers FSPs the chance to sell into more markets, creating new commercial opportunities.
Owners, aggregators, and optimisers of distributed energy resources (DERs) can generate extra revenue and get the most value out of their energy, when offering their services into the flex markets run by the DSOs in their area.