Demand Flexibility Service (DFS) is back in UK’s power markets

During the 23-24th of November weekend, France registered record nuclear modulation activities and unplanned outages amid rising temperatures and stronger-than-average winds. In this article, we discuss the weekend’s market dynamics.

Big updates from NESO: the Demand Flexibility Service (DFS) is back. Following approval from energy regulator Ofgem, the service will officially return live on Wednesday, 27th November 2024, but this time it will not stop only for winter but will become a year-round program. That means households and businesses can sign up through energy suppliers, aggregators, or third-party providers to earn rewards like cash, points, or prizes for shifting electricity use during DFS events. Going forwards the service will directly compete with power generators such as gas power stations and wind farms.

In the last 2 years, this service enabled more than 2.5 million participants to save around 3 TWh of power generation per year.

What’s new this year?

• Year-round access: consumer households and small and medium-sized businesses will be able to participate across the year for the first time, rather than just during winter months. Going forward, the service will directly compete with power generators such as gas power stations and wind farms.
• Market integration: DFS now works alongside other markets like the Capacity Market and local Distribution Network Operator services, giving consumers more flexibility.

In December, NESO will publish the response to its summer call for Input on flexibility as well as the Routes to Market review for demand side flexibility. In that document, we'll set out thoughts on how to ensure fair access to our markets for all types of demand flexibility.

Knowledge pill: what is DFS?

The Demand Flexibility Service (DFS) is one of the services that lie within the Balancing Mechanism. Its aim is to incentivise domestic consumers, industrials, and commercial users to voluntarily reduce or flex their demand through suppliers or demand aggregators. This service has been open and activated during the past two winters, during times of high national demand, particularly on peak winter days when the system could have been placed under stress.