Guidance for distributors providing flexibility services underway

We’re resuming our work on guidance for distributors involved in the flexibility services market. The purpose of the guidance is to minimise the risk – real or perceived – of distributors using their natural monopoly advantage to inhibit others entering the market.

Addressing this risk will support a competitive flexibility services market for more efficient and cost-effective use of the distribution network, putting downward pressure on the overall system costs we all pay for via our power bills.

This work was paused while we focused on higher priority projects in the later part of 2024.

The draft guidance we published for feedback last year comprised seven principles for distributors involved in flexibility services and how we expect distributors to implement those principles.

These principles cover three broad areas:

1. ensuring even-handed treatment of third-party suppliers of flexibility services
2. protecting against the risk (intentional or unintentional) of distributors deterring third parties’ entry into or expansion in the flexibility services market
3. efficient use of flexibility by distributors.

When we tested our draft guidance with distributors, flexibility service providers and others, feedback predominantly related to distributors’ existing use of ripple control.

We are now completing our analysis of the feedback and identifying the next steps. We intend to finalise the guidance for mid-2025.

Distributor involvement in flexibility services market