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.
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