The Demand Flexibility Service (DFS) changed from a winter-only enhanced action to an enduring year-round, in-merit margin tool, the government's statutory security of supply report states1. The change took effect in November 2024, and is set out in the 2025 edition of the report, published on 17 December 2025 by the Department for Energy Security and Net Zero and the Gas and Electricity Markets Authority1.
The report describes the shift in the same terms twice, in its electricity and consumer-led flexibility sections:
"DFS changed from a winter-only enhanced action to an enduring year-round, in-merit margin tool."
Under the previous arrangement, the service ran only in winter as an enhanced action. As an in-merit margin tool it sits among the options the system operator can use in the ordinary course of balancing the network, rather than as a seasonal fallback1.
The report's wider electricity picture for this winter, 2025/26, is a derated margin of 6.1GW, equal to 10.0% of Average Cold Spell peak demand, up from 5.2GW (8.8%) last winter and the highest predicted margin since 20191. It also cites a Loss of Load Expectation of below 0.1 hours per year against a standard of three hours per year1. The Capacity Market, described as technology neutral and intended to ensure security of supply at least cost to consumers, paid out £1.25 billion to agreement holders for the 2024/25 delivery year1. The T-1 auction for delivery year 2025/2026 concluded on 5 March 2025 and secured 7.9GW of de-rated capacity at a clearing price of £20/kW per year; the T-4 auction for 2028/2029 concluded on 11 March 2025 and secured 43.1GW1.
| Item | Figure | Date |
|---|---|---|
| DFS status change | Winter-only enhanced action to year-round, in-merit margin tool | November 20241 |
| Winter 2025/26 derated margin | 6.1GW (10.0% of ACS peak demand) | Published 17 December 20251 |
| Winter 2024/25 derated margin | 5.2GW (8.8%) | Published 17 December 20251 |
| T-1 auction, delivery year 2025/2026 | 7.9GW de-rated, £20/kW per year | Concluded 5 March 20251 |
| T-4 auction, delivery year 2028/2029 | 43.1GW de-rated | Concluded 11 March 20251 |
Why it matters for households
The change means the Demand Flexibility Service is no longer framed as a winter emergency arrangement but as part of how the grid is balanced through the year. For a household, that affects when shifting or cutting demand can earn a payment, and how often such events might be called. The report does not set out payment rates, eligibility or how many events households should expect, and none of those details appear in it1.
The service depends on smart meters and half-hourly settlement to record when a household moves consumption away from a peak. The report does not address what happens for homes without one1. Households that already have home batteries or EV charging that can be timed are the ones most able to respond, because the shift can be automated rather than done by hand.
The security of supply context is the reason the tool exists. A derated margin of 6.1GW for this winter is the highest since 2019, and the report expects GB to have sufficient electricity and gas supplies over the next four years1. Flexibility is one of the levers that keeps that margin comfortable without building more peak generation, which is why its move into year-round use is a structural change rather than a seasonal one. Whether it is worth joining is a separate question from whether it exists, and the report gives no view on that1.
What happens next
The next Capacity Market auctions will be held in March 20261. The report also notes a DESNZ consultation, Gas System in Transition: Security of Supply, which closes on 18 February 20261. No further changes to the Demand Flexibility Service are set out in the report1.