The document discusses the need for flexibility in the UK electricity market to accommodate increasing amounts of variable renewable energy sources like wind power. It notes that demand response capacity and battery storage can provide flexibility but that markets need to be established. Charts are presented comparing demand response markets in different countries as well as falling lithium-ion battery prices. The document proposes a stratified market approach with multiple auction pots and outlines a process for building a flexibility market in the UK.

1. Smart investment
valuing flexibility in the UK electricity market
Amy Mount
Head of Greener UK unit & senior energy policy adviser
Green Alliance 13 October 2016

2. Variable renewables like wind increase the need for
flexibility in the power system
Source: J Cochran et al, 2014, Flexibility in 21st century power systems, National Renewable Energy Laboratory, p2

5. Comparing demand side response capacity across
US, Australian and UK electricity markets
Source: Adapted from Aurora Energy Research Graphic

6. Lithium-ion battery prices are falling fast
Source: National Grid, 2016, Future Energy Scenarios

7. Example of a stratified market with four auction pots

8. Proposed process for building a market for flexibility

9. Everyone wants smart power
but where is the market?
#flexibleenergy

10. The levelised cost of new build CCGT plant for each
scenario

11. Carbon emissions from all CCGT plants (new and
existing) for each scenario