Ofgem asked for views on what the barriers and enablers are for the innovation needed in retail markets to support the Clean Power 2030 and Net Zero 2050 goals.
Ofgem asked for feedback on which areas should be prioritised, and whether it could amend existing rules to improve routes to market for innovators.
The consultation closed on 28 November 2024
Elexon’s view
Unlocking the value of data and flexibility
We believe that the new regulatory framework resulting from Ofgem’s review should pursue the following primary objectives:
- Reducing administrative and financial barriers to innovation and smaller scale flexibility provision (including flexibility provided by households)
- Stimulating consumer trust and awareness relating to the new opportunities offered by the evolution of the system
- Unlocking the value of half hourly data in a secure and trusted way
- Ensuring that consumers will receive adequate protection and incentives for taking up new products and services
- Improving energy management services, particularly comparison websites.
Elexon will provide access to half hourly data to spark retail market innovation
In the last few years, there has been an increase in the amount of innovative services being offered, such as energy as a service, advice and energy management services, load control activities and demand side response.
There has also been an increase in the number of operators providing these services. However there is still much to be done to fully unlock the value of data and flexibility.
Half hourly settlement will pave the way for the development of new, and increasingly personalised products and services. It is also a key enabler and building block for decarbonisation. Unlocking of the value of this data is the main innovation that will support development of the retail markets.
Once suppliers begin to transition their meters to central systems for half hourly settlement from October 2025, Elexon will make the associated consumption data openly, and freely available (through our smart meter data repository) to any person or company that wants to develop new products and services.
And once Elexon has completed implementation of half hourly settlement in July 2027, we will be receiving, processing and publishing around 500 billion half hourly readings per year.
Regulatory change to remove barriers and increase consumer awareness
Elexon supports regulatory initiatives to remove barriers for innovators and flexibility service providers. For example, the development of a Flexibility Market Asset Register will make it much easier to flexibility providers to register an asset once only, so that key details (such as its capability) are visible to market participants.
Ofgem should prioritise regulatory changes that will make it easier for large numbers of consumers to offer flexibility. Households will also need strong financial incentives to change their consumption patterns.
Greater use of flexibility will reduce the costs of system balancing, so that all consumers, including those that are unable or unwilling to participate in the market, will benefit. This will ensure that decarbonisation will be a fair and just transition.
We also welcome the development of the Consumer Consent Solution which will allow consumers to share their data and maintain control over consent when choosing or comparing energy services.
We are committed to working collaboratively with the delivery body Ofgem appoints, to integrate our smart meter data repository with a standardised and trusted consent solution. This will empower consumers to make informed choices in a conscious and transparent way.
Read our response in full
Elexon’s response to Ofgem’s consultation on innovation in the energy retail market