Scottish and Southern Electricity Networks (SSEN) Distribution is launching the Household Or Microbusiness Energy flexibility (HOMEflex) project, announced on 24 August 2022. The two-year project has received Network Innovation Allowance (NIA) funding of £331,000 and will develop the tools to build trust in the domestic flexibility market and support consumers' engagement1.
Flexibility is the ability to shift the timing and location of electricity consumption and generation, so that distribution network operators can balance supply and demand and manage network constraints cost effectively. SSEN states that flexibility could reduce the costs of modernising the UK energy system by up to £10 billion a year and create up to 24,000 jobs by 20501. Trading markets with commercial and industrial partners are already operational, but the scope for domestic consumers and microbusinesses to engage and trade is described as being in its infancy1.
Flex Assure, established by the Association for Decentralised Energy (ADE), will oversee development of a Code of Conduct for domestic flexibility services, frameworks and business models for a voluntary compliance scheme, a mechanism for customer complaints which could include dispute resolution, and a recommended trust mark for aggregators and other market players signed up to the Code and redress schemes1. The Centre for Sustainable Energy (CSE) will lead a research programme using focus groups, and will test the design of the HOMEflex code with consumers. Legal firm Osborne Clarke will provide legal advice and review scheme documentation. The project is supported by the Energy Networks Association's Open Networks Project1.
Simon O'Loughlin, Project Manager for HOMEflex at SSEN, said:
"The embryonic flexibility market for domestic and microbusinesses will not develop if customers do not feel confident of a fair marketplace. This would be a missed opportunity, given a recent trial found that households which own an electric vehicle can reduce the proportion of their energy consumed at peak times by 23%, in response to a request."
SSEN is the electricity Distribution Network Operator responsible for delivering power to over 3.8 million homes and businesses across central southern England and the north of Scotland1.
Why it matters for households
Domestic flexibility means a household shifting when it uses electricity, for example charging a car or running appliances away from peak times, usually in response to a request or a price signal. The trial figure cited by SSEN puts a number on what that can achieve for a household with an electric vehicle: a 23% reduction in the proportion of energy consumed at peak times1. For a home, that is the practical link between household flexibility and reward schemes and what appears on a bill, since shifting load is the behaviour that tariffs with time-varying prices are built around.
The HOMEflex work is aimed at the trust side of that market rather than at hardware or tariffs. SSEN says the market will not develop if customers do not feel confident of a fair marketplace, and the project is intended to ensure the market is inclusive, fair and transparent, with clear lines of accountability so that participants abide by their commitments and customers are protected and rewarded1. The proposed Code of Conduct, complaints mechanism and trust mark are the mechanisms through which that is meant to happen. The ADE's chief executive, Lily Frencham, said domestic flexibility is "a key element in helping us to reach net zero, in reducing energy dependency and increasing security"1, which places the project in the same territory as tariffs and household energy independence.
The project also covers how to support and encourage vulnerable consumers to engage in new markets, and whether flexible solutions could deliver benefits and savings for them1. No detail has been reported on what those measures would be, or on how a household would sign up to anything arising from the project.
What happens next
HOMEflex is a two-year project, which places its conclusion two years after the August 2022 launch on the timeline given1. Flex Assure will oversee development of the Code of Conduct, the compliance and complaints frameworks and the recommended trust mark, while CSE leads the consumer research programme and Osborne Clarke provides legal advice and reviews scheme documentation1. No dates for publication of the Code, the trust mark or the research findings have been reported.