Key insights from our I&C Flexibility workshop

Last week, our Open Energy accelerator workshop brought together network operators, flexibility service providers, regulators, government representatives and energy users to explore a new data sharing Scheme designed to scale Industrial & Commercial (I&C) flexibility across the energy sector.

The objective was to test the use case, understand user needs and explore the data landscape surrounding flexibility markets. A key theme emerged throughout the day: while data is fundamental to scaling flexibility, participation will ultimately depend on whether we can create the right incentives, build trust and clearly communicate the value to different audiences.

This reinforced an insight from our previous webinar that scaling flexibility is far from a one-size-fits-all challenge.

The incentive problem

It’s often assumed that financial incentives alone will drive participation, but our discussions revealed a much broader picture. For some organisations, flexibility supports ESG objectives and carbon reduction commitments. For others, it contributes to energy resilience, operational security or reducing pressure on an increasingly constrained energy system. In a UK market facing volatile prices and some of the highest energy costs in Europe, the motivations for participating vary significantly.

The ESG angle is a particularly interesting one, but as Charlotte Roniger, Flex Assure UK points out:

“For flexibility to scale in the I&C sector, ESG frameworks need to catch up. The strongest business case for consumer-led flexibility isn’t always on the balance sheet, sometimes it’s in the sustainability report.”

Even if the business case was centred around balance-sheet considerations, it’s important to be realistic about the financial returns available. Flexibility revenues alone are not always enough to drive widespread participation. If we want to attract more organisations, we need better ways of discovering, engaging and validating participants while clearly articulating the broader value flexibility can deliver. The incentives, in other words, go beyond revenue generation.

Data & Trust

While much of the discussion focused on incentives for participation, it quickly became clear that organisations cannot participate in flexibility markets if they cannot see, understand or trust the opportunities available to them.

For flexibility providers, networks and energy users to coordinate effectively, they need access to high-quality, interoperable data that can be shared securely. Visibility of assets, standardised information and clear governance frameworks all help reduce the friction that currently makes flexibility difficult to discover, assess and scale.

While some of this work is being tackled by sector initiatives already under development – for instance the Flexibility Market Asset Register – the event highlighted ongoing gaps in the data sharing needed to get energy consumers to the starting line of market participation (e.g. opportunity assessment linked to decarbonisation or electrification planning) and to evidence the impacts of trades (e.g. carbon savings).

Communicating value: a hearts and minds challenge

Even with the right data and incentives in place, bringing the right players to the table depends on how effectively we communicate the value of participating in flexibility markets. But, like incentives themselves, this is not a one-size-fits-all challenge.

Scaling flexibility requires us to communicate value differently to different audiences. What resonates with a CFO may be predictable revenue streams or accelerated connections helping a business to expand. What motivates a sustainability team may be progress against ESG goals and carbon reduction targets. For policymakers, the focus may be energy security, decarbonisation and system efficiency.

Understanding these different perspectives is critical. Participation will not come from incentives alone, it will come from building confidence, trust and a shared understanding of the role flexibility can play.

As one participant reflected: “Long-term change isn’t going to come from incentivisation alone. We need to be thinking about cultural change.” This was perhaps the most important takeaway from the workshop. Scaling flexibility is not just a technical challenge; it is a challenge of coordination, trust and engagement, as Simon Evans, Arup stated:

“Delivering flexibility at scale is a socio-technical challenge and is as much, if not more, about trust, governance, and incentives as it is about technology and data.”

Help shape the future of I&C Flexibility

Flexibility already forms a core part of the Government’s Clean Power 2030 Action Plan and has the potential to deliver clear value – from reducing system costs for networks to unlocking new revenue streams and resilience for energy users. But if flexibility is to scale, we need to look beyond technology and market design alone.

Expressions of interest are now open for joining our Open Energy advisory groups. This is an opportunity to help shape the future design of the Scheme as we move towards pilot and implementation.