Elexon appointed as the market facilitator for local flexibility

Ofgem has today (29 July 2024) announced that Elexon has been appointed as the market facilitator for local flexibility.

This follows Ofgem’s consultation in December 2023 on whether Elexon or the Future System Operator (the National Energy System Operator) should deliver the role.

See Ofgem’s statement on the market facilitator delivery body

Flexibility must play a bigger role in the energy system

The Government has set a target for clean power by 2030 and it is unlikely that we will reach that goal without having a system in which flexibility plays a much bigger role. The market facilitation of local flexibility markets will help to remove barriers that are preventing the full value of flexibility from being realised. Greater use of flexibility could reduce the cost of the electricity system for consumers, for example, by deferring or avoiding investment in network infrastructure.

Workstreams to complete before go-live

Ofgem has set a target for the market facilitator to begin operations by early 2026 at the latest.

This will follow the successful completion of three workstreams:

• The detailed design of the market facilitator role and functions.
• Development of Modifications to the BSC to (firstly) allow Elexon to take on the role, and (secondly) establish the governance and funding model for it.
• Work across the industry and with the Energy Networks Associations’ Open Networks project to maintain the growth of flexibility markets, in advance of the co-ordinating role the market facilitator will play for these.

Performing the role for the benefit of all participants and consumers

Elexon Chief Executive Officer, Peter Stanley says:

“We are pleased to be appointed by Ofgem to deliver the market facilitator role. Flexibility will be pivotal to the energy sector’s drive to Net Zero and we will work with Ofgem, the NESO, flexibility providers, Distribution System Operators and the industry to ensure that we deliver the role successfully.

“Elexon is a neutral body that is recognised for the inclusive and collaborative approach we take to working with the industry. We can provide confidence that we will act impartially when delivering the role, for the benefit of all market participants and consumers.”

Elexon will work at pace with Ofgem, and market participants from now on to complete the three workstreams.

Elexon is fully committed to completing Market-wide Half Hourly Settlement implementation in December 2026 and continuing our high standards of service under the BSC arrangements.

Further information

• See Ofgem’s decision document on the market facilitator delivery body
• Ofgem has also published its Future Market Asset Registration consultation, which is linked to the market facilitator role (as it relates to the digital infrastructure which will be needed to support flexibility markets).