New partnership between UK Power Networks and EPEX SPOT set to “supercharge flexibility market”

UK Power Networks Distribution System Operator (DSO) has announced a partnership with the power market operator EPEX SPOT to host its flexibility market.

The new cooperation is set to deliver a paradigm shift in the flexibility market. It opens the market to a new segment of participants, bringing EPEX SPOT’s wholesale market expertise to local flexibility markets, delivering a world-class customer experience.

UK Power Networks DSO has committed to saving customers £410m by 2028 and has delivered £60m worth of savings in 2023 alone, by utilising flexibility as an alternative to the traditional approach of delivering network capacity by building more infrastructure.

Whether customers want to trade power for today or the next day: EPEX SPOT is the no.1 power spot exchange in Europe with the highest total traded volume and widest range of innovative products. EPEX SPOT is shaping the future of short term electricity auction and continuous markets, offering unparalleled opportunities for over 140 members and exceeding 8TWh traded monthly in GB.

EPEX SPOT was appointed as the new flexibility market platform provider after a competitive tender. As the leading European short-term power exchange, EPEX SPOT has a strong track record in delivering innovative market design and brings together a community of UK energy trading companies with opportunities to benefit from UK Power Networks’ flexibility market. As the only independent DSO, UK Power Networks has already awarded contracts for more than 1GW of flexibility. Working together, the two companies are confident they have the ingredients for a highly scalable, innovative and coordinated flexibility market.

As part of the deal, EPEX SPOT will adopt the industry-standard processes and products defined through the Open Networks programme. While the Localflex platform offers a full set of Application Programming Interfaces (APIs), these will be reviewed in the context of industry developments to simplify participation for flexibility providers and maximise interoperability with other market platforms.

Flexibility providers will be supported to register on the EPEX SPOT Localflex platform and will have the opportunity to help shape priorities for platform development.

In December 2023, UK Power Networks began a trial of day-ahead flexibility procurement in East Anglia. This process will be migrated to the Localflex platform from April 2024, followed by UK Power Networks’ long-term flexibility tenders from May 2024.

Sotiris Georgiopoulos, director of DSO at UK Power Networks said: “EPEX SPOT offers the opportunity to exceed our commitment to avoiding £410m of infrastructure investment between 2023 and 2028. We’re looking forward to working together with EPEX SPOT and our market participants to deliver a world class customer experience and contribute to a more joined up British flexibility market.”

Ralph Danielski, chief executive officer of EPEX SPOT, said: “The pioneering partnership between UK Power Networks and EPEX SPOT for the market-based procurement of flexibility marks an important milestone in facilitating Net Zero. The project serves as a lighthouse towards the entire energy sector, and we are very looking forward to further shape the future of flexibility markets.”

Local flexibility markets are playing a key role in minimising the need for additional grid infrastructure to accommodate the growth of low carbon technologies such as electric vehicles, heat pumps and renewable generation. It is widely accepted that flexibility will be an enabler of a timely and low cost Net Zero transition.

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