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Local Flexibility Market

Local Flexibility Markets are driven by a single buyer at the top creating a market for flexibility in the local area. The market would send out signals from the buyer to aggregators and energy asset owners in the area.  It will enable aggregators and distributed energy assets to provide flexibility, in electricity demand, either for the system operator or someone else at a local level. Unlike a Local Energy Market, only flexibility and constraint management is being procured.

Why is it better for Net Zero?

A single buyer creates a market and better business case for local, flexible energy assets

What makes it a SLES?

Marketplace / platform for flexibility

Main Low Carbon Interventions

Storage, EV Charging, Heat with storage.

Key Benefits

Financial

  • Lower energy bills for end users.
  • Improved business case for asset owners.
  • Reduce public money (including grants) required for net zero.

Resilience

  • Reduce impact of constraints.
  • Reduce need for network upgrades and reinforcement.
  • More diversity and flexibility in local network.

Net Zero

  • Accelerates roll out of low carbon technology.

Health and Wellbeing

  • Funded projects can be targeted at vulnerable / fuel poor.

Considerations

Market Design

  • Need to create right price signal and incentives for local flexibility, the current market rules do not sufficiently reward it.
  • If moving to a local system operator how will they integrate with wider system operation at a regional and national level?

Net Zero

  • Favours flexibility over the delivery of net zero.

Scalability

  • No consistent approach for buying local flexibility.
  • Harder for smaller scale assets to participate.

Fair Transition

  • Extra support needed for vulnerable customers. Flexibility markets alone will not address fuel poverty concerns.

Where could local authorities fit into Local Flexibility Markets?

Local System Operator – play a greater role in managing local networks and systems operation. Higher complexity and risk but much greater control in delivering climate strategy.

Invest in Energy Assets – Local Flex Market will improve the business case for energy assets that can provide local flexibility.

 

Smart Local Energy Systems

Supporting the creation of Smart Local Energy Systems to attract innovative low carbon businesses, infrastructure, investment and jobs

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