The Association for Decentralised Energy (ADE) has today issued a scathing critique of the emerging National Energy System Operator (NESO), which exposes the deep flaws in the system’s readiness to meet the needs of public. As part of the ADE’s ’Empowering Energy Demand’ campaign, the report warns that the energy revolution’s potential is being undermined by entrenched practices that threaten the UK’s path to Clean Power by 2030.
The report has determined that NESO operates with outdated practices inherited from the ESO (Electricity System Operator). The trade association argues that such a lack of adaptation stifles innovation and prevents consumers from fully benefiting from the clean energy future. In stark terms, the report emphasises that the system remains skewed towards large generators, with consumer benefits taking a back seat.
Analysis in the report shows that current market structures are biased against demand-side flexibility, which is a crucial component in balancing renewable generation and could save the country £14.1 billion per year by 2040. The ADE highlights that NESO’s design of ancillary services excludes small, flexible technologies, delaying the integration of low-carbon assets. The report further argues consumer behaviour and the potential of demand-side flexibility are largely excluded from NESO’s markets. Representing the opinions of over 150 organisations from the energy sector, the ADE claims that this short-sightedness will result in higher costs for consumers and slow the pace of decarbonisation.
Caroline Bragg, CEO of the ADE, did not mince words: “This report lays bare the uncomfortable truth: NESO is not just behind schedule; entrenched practices are undermining the very future it is supposed to protect. We need urgent, radical reform to put consumers at the heart of our energy strategy.
“Parliament, Government, and Ofgem must act swiftly to overhaul NESO’s operational framework. Among the key recommendations are a formal parliamentary inquiry into NESO’s performance to ensure it can deliver Clean Power by 2030. Government needs to give clear directives for NESO to inspire cultural transformation and draw attention to consumer-driven demand-side participation.”
In reply to The Energyst regarding the above article, the Energy Systems Operator, comments, “The ESO is committed to opening up markets and maximising competition for the benefit of consumers as we drive towards more flexibility in our energy system. This is a vital mission for our whole industry to come together and achieve.
“Transforming Great Britain’s complex energy system and embracing the power of flexibility of all shapes and sizes is, as the ADE sets out, no small feat. We recognise that there is more progress to be made but Great Britain is a leader in flexibility, with the fastest decarbonising grid in the G7. As we move forward, the establishment of NESO will be instrumental in helping to navigate the complexities of our evolving energy system to achieve our net zero and energy security goals.
“Our world-leading Demand Flexibility Service resulted in millions of households engaging with consumer flexibility for the first time, which the ADE’s report credits as projecting flexibility into the mainstream.
“Moving demand for things like heat and transport away from the peak we can make the whole system cheaper, building less power stations and less network – a huge win for Great Britain. We are steadfast in our commitment to delivering a flexible, clean, green grid for the future – while also ensuring that we maintain the security and integrity of the system at all times.
“We are engaging comprehensively with flexibility providers to develop the advice that NESO will be providing to Government on the pathways to reaching Clean Power by 2030 and in the near future we will be publishing a new flexibility markets strategy. Both of these plans are being developed in consultation with stakeholders and we welcome all engagement.”
