Tag: Flexgen

Demand Side Flexibility gets a winter boost

6 February 2026

Opinion

The Government’s Clean Power 2030 Action Plan and Clean Flexibility Roadmap established demand-side flexibility (DSF) as an essential component of the transition to a smarter, more flexible energy system. The Action Plan targets 10-12GW of DSF from a range of different sources by 2030, supported by actions outlined in the Roadmap.

Several updates in December 2025 reveal strong progress towards a more flexible future.

DSF Routes to Markets Review

In December, the National Energy System Operator (NESO) published its Demand-Side Flexibility Routes to Markets Review. The report highlighted progress against identified barriers for DSF participants accessing NESO flexibility services and proposed reforms to the Demand Flexibility Service (DFS). These reforms included introducing demand turn-up, locational procurement and reducing minimum unit size to 0.1MW.

NESO also announced an update to the operational metering requirements for <1MW aggregated assets within the balancing mechanism (BM). It plans to relax accuracy, refresh rate and latency requirements in early 2026 to make the BM more accessible to small scale aggregated assets.

NESO targets 750MW of I&C DSF

Following on from the Routes to Market Review, NESO set a target to add 750MW of additional industrial and commercial (I&C) flexibility to its markets by 2030. NESO’s target is for demand turn-down only and excludes transport and embedded generation. The target is designed to support the Clean Power 2030 (CP30) ambition of 1.7GW of I&C DSF by 2030, more than doubling 2024 levels.

Wider NESO actions support DSF

In its market update, NESO announced the establishment of a dedicated onboarding team for non-domestic providers to support large end consumers in accessing flexibility markets. It also extended the Local Constraints Market (LCM) until January 2027, having seen growth in demand-side participation. NESO attribute this growth to including a progressive asset metering approach, no minimum MW participation threshold, and changes to support aggregator participation.

Market Facilitator

Elexon’s role as Market Facilitator went live on 12 December 2025. As such, it will coordinate local and national flexibility market arrangements to enhance liquidity and reduce friction. It’s already established 10 market rules applicable to District Network Operator (DNO) and NESO markets, to be implemented at various points during 2026. Elexon intends to improve standardisation in matters such as carbon reporting, end-to-end processes, product definitions, prequalification for accessing markets, and primacy between different services.

Drax agrees Flexitricity purchase

Drax Energy Solutions is a decarbonisation partner for many I&C businesses across Great Britain. We support our customers in accessing revenues for flexibility, and were the largest I&C supplier in NESO’s DFS for the first two winters cumulatively. On 21 January 2026, Drax Group announced an agreement to acquire Flexitricity, a UK-based optimiser of flexible energy assets.

Founded in 2004, Flexitricity provides – via a proprietary controls platform – optimisation and route-to-market services to owners of flexible energy assets. This enables those owners to participate in the wholesale energy, balancing and ancillary services markets. Aligning the scalable platform and optimisation expertise of Flexitricity with the trading and supply expertise of Drax Group is expected to bring benefits to the customers of both companies.

We expect to complete the acquisition, which is conditional on the completion of regulatory approvals and processes, in Q1 2026.

Disclaimer: We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.

Flexibility Focus looks at a more responsive and decentralised GB power system

5 February 2026

Opinion

Q4 2025 established new rules, targets and obligations for a more responsive and decentralised GB power system. The National Energy System Operator (NESO) set a clear ambition to unlock an additional 750MW of industrial and commercial (I&C) flexibility by 2030, reinforcing the growing role of consumer-led flexibility in supporting Clean Power 2030.

Wholesale markets were shaped by volatile wind output and mild winter temperatures. While average prices remained relatively stable, periods of low wind and high demand pushed prices above £200/MWh on three occasions, strengthening the business case for flexibility and peak demand shifting. Delivered cost arbitrage opportunities were significantly higher than in Q3 due to the application of winter third party costs. Consumers on pass-through contracts could have been able to save over £380/MWh by shifting demand from peak periods.

The Demand Flexibility Service (DFS) saw lower volumes than Q3, driven largely by mild weather and reduced system stress. However, activity shifted later into the evening peak, reflecting changing demand patterns and seasonal drops in solar generation. NESO also confirmed upcoming reforms, including demand turn-up, locational procurement, sub-1MW bids, and improved baselining for variable assets – all expected to widen participation.

On the policy and regulation side, Elexon’s new Market Facilitator role went live, introducing standardised rules designed to reduce barriers to entry across flexibility markets. Meanwhile, the upcoming launch of Slow Reserve in March 2026 will replace STOR, with more accessible thresholds and improved routes for demand-side response providers.

Looking ahead to Q1 2026, the market awaits key decisions on Capacity Market reforms, and further announcements as part of the Review of the Electricity Market Arrangements (REMA) programme, including updates to balancing reform – all of which will shape the next phase of flexibility growth.

At Drax Energy Solutions, the announced agreement to acquire Flexitricity will, once complete, strengthen our ability to help customers unlock greater value from their flexible assets and participate across an expanding range of markets.

Read the full Flexibility Focus report for detailed market analysis, policy updates and revenue insights here. 

Disclaimer: We’ve used all reasonable efforts to ensure that the content in this article is accurate, current, and complete at the date of publication. However, we make no express or implied representations or warranties regarding its accuracy, currency or completeness. We cannot accept any responsibility (to the extent permitted by law) for any loss arising directly or indirectly from the use of any content in this article, or any action taken in relying upon it.

Tolling agreement for 250MW (500MWh) of BESS

30 January 2026

News

RNS Number: 9970Q
Drax Group plc
(“Drax” or the “Group”; Symbol:DRX)

Drax is pleased to announce that it has signed a tolling agreement with West Burton C Limited, a company owned by Fidra Energy (“Fidra”, an independent Battery Energy Storage Systems “BESS” developer)(1), for 250MW (500MWh) of new BESS capacity.

Highlights

  • Tolling agreement for 250MW 2-hour duration BESS at West Burton, England
  • No upfront capital cost – construction, maintenance and availability risk sits with Fidra
  • 10-year tolling agreement with annual payments indexed to UK CPI
  • Contract provides Drax with full operational control and dispatch rights
  • Protected grid connection, targeting a Commercial Operation Date (COD) in 2028
  • Expected returns significantly ahead of Drax’s Weighted Average Cost of Capital(2)
  • Strong strategic fit
  • Aligned with Drax FlexGen strategy, adding short duration and fast response capability
  • Complements Drax investments in physical ownership of BESS and asset optimisation
  • Closely aligned with UK energy objectives of energy security and decarbonisation

Drax Group Chief Executive Officer, Will Gardiner, said: “Flexible Generation technologies like battery storage will support a secure, affordable and clean energy system for British homes and businesses. Our first BESS tolling agreement is an important step in our ambition for a gigawatt scale pipeline of battery storage opportunities, alongside our recent acquisitions of Flexitricity and three battery storage developments.

“We are working to create opportunities for growth and value creation in our FlexGen portfolio that are aligned to the UK’s energy needs, and are underpinned by strong cash generation, disciplined capital allocation and attractive returns for shareholders.”

Under the agreement Fidra will retain responsibility for construction, maintenance and availability of the asset during the contract period. In return Drax will pay a fixed annual tolling fee over the agreed term of 10 years from the COD, in return for full operational control and dispatch rights, retaining all revenues (excluding Capacity Market revenues).

Drax sees the agreement as a capital light opportunity to provide additional BESS capacity for the Group’s FlexGen portfolio, alongside physical ownership of BESS assets(3).

The agreement is subject to Fidra taking a final investment decision on the project by Q3 2026 and commercial operations by H2 2029.

Strategic fit – aligned with UK energy needs and Drax FlexGen business

Drax is developing a GW scale pipeline of BESS opportunities comprised of (1) physical assets and (2) the capabilities to optimise third-party assets with the provision of route to market, floor and tolling structures.

In October 2025, Drax signed an agreement with Apatura Limited to acquire three BESS projects, which when fully commissioned will provide capacity totalling 260MW(3). In January 2026 Drax announced the acquisition of Flexitricity, providing an optimisation platform for the development of the Group’s FlexGen business, including BESS(4).

Notes:

  1. Battery Energy Storage | Flexible Battery Electricity | Fidra Energy
  2. The cash flow that Drax expects to generate over the life of the contract when compared to the present value of the annual toll payments, is expected to deliver a return significantly above Drax’s WACC.
  3. Acquisition of 260MW 2-hour BESS portfolio – 07:00:11 30 Oct 2025 – DRX News article | London Stock Exchange
  4. Acquisition of Asset Optimisation Platform – 07:00:06 21 Jan 2026 – DRX News article | London Stock Exchange

Enquiries:

Drax Investor Relations:

Mark Strafford
[email protected]
+44 (0) 7730 763 949

Chris Simpson
[email protected]
+44 (0) 7923 257 815

Media:

Drax External Communications:

Chris Mostyn
[email protected]
+44 (0) 7743 963 483

Andy Low
[email protected]
+44 (0) 7841 068 415

Website: www.drax.com

Forward-looking statements

This announcement may contain certain statements, expectations, statistics, projections and other information that are, or may be, forward-looking. The accuracy and completeness of all such statements, including, without limitation, statements regarding the future financial position, strategy, projected costs, plans, beliefs, and objectives for the management of future operations of Drax Group plc (“Drax”) and its subsidiaries (“the Group”), are not warranted or guaranteed. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although Drax believes that the statements, expectations, statistics and projections and other information reflected in such statements are reasonable, they reflect Drax’s current view and no assurance can be given that they will prove to be correct. Such events and statements involve risks and uncertainties. Actual results and outcomes may differ materially from those expressed or implied by those forward-looking statements.

There are a number of factors, many of which are beyond the control of the Group, which could cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements. These include, but are not limited to, factors such as: projects achieving the required milestones, including delivery of required equipment, access to the requisite resources and completion of connections to enable operation within expected timeframes, future revenues being lower than expected; increasing competitive pressures in the industry; uncertainty as to future investment and support achieved in enabling the realisation of strategic aims and objectives; and/or general economic conditions or conditions affecting the relevant industry, both domestically and internationally, being less favourable than expected, including the impact of prevailing economic and political uncertainty; the impact of conflicts around the world; the impact of cyber-attacks on IT and systems infrastructure (whether operated directly by Drax or through third parties); the impact of strikes; the impact of adverse weather conditions or events such as wildfires; and changes to the regulatory and compliance environment within which the Group operates. We do not intend to publicly update or revise these projections or other forward-looking statements to reflect events or circumstances after the date hereof, and we do not assume any responsibility for doing so.

END