Post: DFS set for another season

DFS set for another season

The Electricity System Operator (ESO) has said it is considering the return of the Demand Flexibility Service (DFS) in Winter 2023-24 and exploring additional operational options due to ongoing uncertainties.

In its Early View of Winter Outlook report for 2023-24, published on 15 June, the ESO forecasts a de-rated margin of 4.8GW (around 8%). This is slightly higher than this time last year but is relatively in line with margins across previous winters. The increased margins compared to last year are driven by the availability of additional new generation, improved data quality, the availability of generation units that were partially or fully unavailable last winter and the return to the capacity market of one of the coal contingency units used last winter, which will now operate in the normal electricity market for this year.

But in light of the continued risks and uncertainties relating to the Russian invasion of Ukraine the ESO continues to explore the potential availability of additional operational options. The ESO is proposing the return of the DFS.

The Demand Flexibility Service (DFS), which was introduced last winter to help the UK cope with tight energy supplies, saved over 3,300MWh of electricity across the events, National Grid ESO has confirmed.

In total, 1.6M households and businesses signed up to participate in 22 events across the winter, covering both live events to balance the electricity network and monthly test events to deliver savings for consumers and demonstrate how effective the system could be.

GridBeyond provided DFS service to its clients over the winter and helped deliver 190.01MWh across the five months.

A formal consultation process has just begun to determine the final terms of this years’ service. Further announcements will be made following this process. Following a request from the Government the ESO is continuing to have discussions on the availability of two of the five coal contingency units that were used last winter.

A more detailed Winter Outlook report will be released later, and the ESO has confirmed that customer demand remained uninterrupted during the previous winter season.

The ESO also issued its review of the 2022-23 Outlook noting that Winter margins were broadly in line with those in its Base Case scenario. Across the 2022/23 winter, balancing costs were around 20% lower than the preceding winter of 2021-22, though these costs remained higher than other previous years, driven principally by gas wholesale prices. Through the use of normal operating tools, the availability of contingency coal contracts and the Demand Flexibility Service, the ESO was able to operate within its operational margins, meaning that there was no interruption to customer demand, due to unavailable supply on the national electricity transmission system.