Why Understanding Flexibility Markets Matters More Than Ever

The role of flexibility in the GB electricity system has never been more important.

Traditionally, flexibility was often associated with a handful of large generators helping the system respond to fluctuations in supply and demand. Today, the picture is much more complex. Batteries, demand-side response (DSR), flexible generation, electric vehicles, heat pumps and other distributed energy resources are increasingly being called upon to support system operation.

At the same time, market access is expanding. Ongoing reforms are designed to make it easier for smaller and more diverse assets, such as household EV charging points and domestic scale Battery Energy Storage Systems (BESS) to participate in balancing and ancillary services markets, creating new opportunities for asset owners, suppliers, aggregators and investors.

Flexibility Is No Longer Just a Winter Story

Historically, conversations around flexibility have often centred on winter peaks and security of supply during periods of high electricity demand.

However, recent summers have demonstrated that flexibility has become a year-round requirement.

The heatwaves experienced across Great Britain have driven higher electricity demand, particularly from air conditioning and cooling loads. As temperatures increase, the electricity system must manage both changing demand patterns and the challenges associated with renewable generation variability.

During the summer, the National Energy System Operator (NESO) issued four Electricity Margin Notices. While each was ultimately withdrawn, they nonetheless highlighted the challenging operating conditions faced by the electricity system during prolonged periods of extreme heat.

These events serve as a reminder that flexibility is playing an increasingly important role throughout the year, not simply during traditional winter demand peaks.

A Market Undergoing Significant Change

The flexibility landscape continues to evolve at pace. Recent and ongoing developments include:

• Changes to industry codes such as the BSC and CUSC governing participation in balancing and flexibility markets.
• Reforms to network charging arrangements.
• Changes to connection processes and access rights.
• Evolving arrangements for demand-side response participation.
• Continued work on bid and offer pricing within the Balancing Mechanism.
• Increasing coordination and integration between flexibility products and services.
• The planned introduction of the Flexibility Market Asset Registration (FMAR) framework, expected to launch in late 2027.

Alongside these changes, policymakers and market participants are increasingly examining ways to combine and stack revenues across services, including opportunities to participate simultaneously in multiple markets where technically feasible.

Examples include closer coordination between products such as the Demand Flexibility Service and local network flexibility schemes, helping assets maximise value while supporting system reliability.

Growing Commercial Opportunities

As flexibility becomes more valuable to system operation, commercial opportunities are also expanding.

Cornwall Insight’s own market analysis indicates significant growth potential for flexibility assets over the remainder of the decade. In particular, the offtake (PPA) market for flexibility assets, including battery storage and gas peaking plant, could almost double by 2030.

For organisations considering investment in flexible assets, understanding how revenues are derived from different markets is increasingly important. The interaction between wholesale markets, balancing services, network flexibility opportunities and capacity mechanisms can materially affect project economics.

Those involved in market strategy, regulation, trading, asset development and commercial management therefore need a clear understanding of how flexibility markets operate and where future opportunities may emerge.

Building Capability Through Cornwall Insight Learning

While the opportunities are significant, flexibility markets remain complex.

Participants must navigate:

• Multiple market routes to participation.
• Rapidly evolving regulatory frameworks.
• Industry code modifications.
• Technical asset requirements.
• Revenue stacking opportunities.
• Emerging consumer-led flexibility schemes.
• The growing role of aggregators and virtual power plants.

Cornwall Insight’s Learning Services are designed to help professionals develop a practical understanding of these complex markets. Our training courses cover the fundamentals of flexibility, including:

How the GB electricity system is balanced.

• The role of NESO and network operators.
• Balancing Mechanism participation.
• Ancillary and balancing services.
• Demand-side response.
• Battery storage business models.
• Revenue streams and market stacking.
• Consumer-led flexibility opportunities.
• Future market developments and regulatory change.

Whether you’re new to flexibility markets or looking to deepen your understanding of emerging opportunities, our courses provide the knowledge and context needed to navigate this rapidly changing landscape with confidence.

Upcoming Courses

Flexibility Academy

Aimed at grid-scale flexibility providers. Delegates will learn about key flexibility services, including reserve, response, and the Balancing Mechanism; procurement processes, market value trends, and participating asset types; and outlook for flexibility markets, including the development of DSO services.

Understanding Consumer-led Flexibility Opportunities

Aimed at how electricity customers, can participate in ‘flexibility’ markets to help lower their bills. Delegates will learn what consumer-led flexibility is and why demand is growing; how flexibility services in GB work, from the Balancing Mechanism to the Demand Flexibility Service; how end users can access the market via aggregators and optimisers’ and what’s coming next, including Capacity Market reforms, the Clean Flexibility Roadmap, and more.

Find Out More

As flexibility becomes an increasingly important part of the energy transition, organisations that understand how these markets work will be best placed to identify opportunities and manage risks.

Cornwall Insight’s training programmes help delegates build the skills, knowledge and confidence needed to operate successfully in one of the most dynamic areas of the GB energy market.

To learn more about our flexibility and electricity market training courses, get in touch with the Cornwall Insight Learning team at training@cornwall-insight.com with more information here.