As National Grid ESO runs its first live ‘demand turn down’ events through the Demand Flexibility Service (DFS), the HOMEflex project has today published its report into what standards are needed for the domestic flexibility market, to ensure consumer protection keeps pace with market innovation.
Flexibility markets with commercial and industrial partners are already operational, but the scope for domestic consumers and micro-businesses to engage and trade is in its infancy. The potential system savings of a fully-functioning flexibility marketplace could reach £50bn by 2050 [1], but the current lack of standards and assurance mechanisms could risk limiting customer uptake due to lack of trust, ultimately leading to negative outcomes and publicity, undermining participation in flexibility markets.
The HOMEflex project is led by Scottish and Southern Electricity Networks (SSEN) Distribution, alongside project partners Centre for Sustainable Energy (CSE) and Flex Assure, which was established by the Association for Decentralised Energy (ADE). HOMEflex will develop a Code of Conduct for domestic flexibility services covering the main areas of consumer protection, including sales and marketing, contracts, terms and conditions, complaints and redress.
CSE has led qualitative research with a diverse group of consumers to bring their concerns and opinions into the process of drafting a Code of Conduct. This will be the foundation to a well-functioning flexibility market that is shaped by transparency, inclusivity and respect.
Simon O’Loughlin, Project Manager for HOMEflex at SSEN, said:
“The cost of energy crisis has propelled public interest in new products and services like domestic flexibility trading, which means we must work fast to ensure the rules are in place to support a fair, transparent marketplace. HOMEflex is listening to consumers to embed their concerns and priorities in a Code of Conduct that can offer structure and protection for all flexibility trading participants. The potential financial benefits of a smart and flexible energy system are considerable but without public confidence in the new market, they will remain unrealised.
“SSEN’s vision is for a just transition to net zero, in which everyone who wishes to participate, can do so with confidence. We are delighted to be working with our partners on the HOMEflex project to embed fairness in the net zero future.”
Lily Frencham, Chief Executive Officer from the Association for Decentralised Energy said:
"The ADE is delighted to support the HomeFlex project, through our involvement with the Code of Conduct and compliance scheme, Flex Assure. Domestic flexibility has proven to be crucial already this winter and will continue to be an important part of reducing costs and increasing security on our journey to net zero.
"This research carried out by CSE will be extremely valuable in our development of a Code of Conduct that will work for both consumers and providers, while helping us to better understand the future direction of the flexibility market following the launch of National Grid ESO’s DFS this winter."
Charlotte Johnson, Head of Research Programmes from CSE said:
“Creating the conditions for a fair and inclusive energy transition is central to CSE’s Smart and Fair programme which champions social justice in the energy system. Through the HOMEflex research, we engaged with consumers who have very different living situations and attitudes towards technology to understand their concerns and expectations for flexibility services.
“The timeliness of this report is evident. Currently the National Grid ESO’s Demand Flexibility Service has 26 providers all using their own terms and conditions, offering different routes to sign up, and passing on different proportions of incentive to consumers. This creates a very complex market for domestic consumers to navigate. Our research will help industry and government think about the consumer protections needed as the UK domestic flex market develops. This will be vital to build consumer confidence in this growing market.”
HOMEflex is a two year project which has received Network Innovation Allowance (NIA) funding of £331,000 and is supported by the Energy Networks Association’s (ENA) Open Networks Project.
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