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News & insights

Date: September 2022 | Client: Elexon | Sector: Energy | Expertise: Appraisal & evaluation

CEPA’s impact assessment of proposed energy market reforms to encourage flexibility

Flexibility will be an essential component of the energy sector transition to net zero carbon emissions. As demand is electrified with the take-up of electric vehicles, heat pumps and other emerging technologies, the demand side will increasingly provide flexibility potential.

CEPA has been supporting Elexon with an impact assessment of BSC Modification P415. The ‘mod’ is designed to allow independent aggregators of demand side response (‘Virtual Lead Parties’ or VLPs) to trade customer flexibility directly in the wholesale market.

We carried out three key activities:

  • An assessment of the evidence base regarding the amount of flexibility that could be delivered by VLPs.
  • Wholesale market modelling of key costs and benefits.
  • An assessment of non-modelled impacts including wider benefits, costs of implementation, risks and unintended consequences.

Our work will now help to inform the final design and assessment of the modification before it is passed to Ofgem for decision.

We’re proud to have supported Elexon in this important area of the wholesale market arrangements for a decarbonised energy system. Our report is available to download from the Elexon website.

To find out more, please contact our experts listed below.