Join our workshop: roadmap for flexibility market coordination

What this is about

Elexon is convening a workshop on 21 April 2026 to shape a strategic roadmap for flexibility market coordination. The core question: how should GB's multiple flexibility markets — wholesale, balancing, and local — fit together so that distributed energy resources can participate without falling through the gaps between them?

This matters because flexibility is currently traded across several disconnected venues with different rules, different settlement processes, and different price signals. A battery operator stacking revenues from the Balancing Mechanism, a local flexibility service for a DNO, and a wholesale position faces three separate sets of rules that were not designed to interact. The result is transaction costs that suppress participation and price signals that contradict each other. Coordination does not mean centralisation — it means making the interfaces work so that a megawatt of flexibility dispatched in one market does not create a problem in another.

Key points

The coordination problem is real and structural. GB has at least four distinct flexibility procurement channels: the wholesale market (day-ahead and intraday), the Balancing Mechanism (NESO dispatch), the Capacity Market (availability payments), and emerging local flexibility markets (DNO procurement via platforms like Piclo and Flexible Power). Each was designed independently. None was designed to account for the others. When a DNO contracts flexibility that changes flows at the transmission level, NESO's balancing actions may offset or duplicate the effect. Nobody pays for the coordination failure, so nobody fixes it.

Elexon's role is settlement, not market design. Elexon operates the BSC (Balancing and Settlement Code), which governs how electricity volumes are measured and settled. Its interest in flexibility coordination is about ensuring that flexibility actions are correctly reflected in settlement — that a battery dispatched for local flexibility is not also penalised for an imbalance it did not cause. This is a narrower but essential piece of the puzzle. If settlement does not recognise flexibility dispatch across markets, the commercial signals are wrong.

The roadmap approach signals a multi-year horizon. This is not a consultation on a specific rule change. It is a scoping exercise to define what coordination should look like and what Elexon's role should be within it. That means any concrete changes to settlement arrangements, data sharing, or market interfaces are likely 2027 at the earliest. The workshop is input-gathering, not decision-making.

MHHS is the enabler. Market-wide Half Hourly Settlement, currently in implementation, is the infrastructure that makes granular flexibility settlement possible. Without half-hourly measurement of all meters, flexibility actions by smaller distributed assets cannot be properly attributed. The coordination roadmap is implicitly a post-MHHS agenda — it assumes the settlement granularity that MHHS will provide.

Overlapping initiatives across multiple bodies. This sits alongside NESO's work on a Single Electricity Market Platform, Ofgem's Review of Electricity Market Arrangements (REMA), and the DNO-led local flexibility procurement frameworks. The risk is that each body develops its own coordination vision without coordinating the coordination. Elexon is one voice among several, and the workshop will be useful to the extent it produces a clear view of where BSC settlement needs to change, rather than a general statement about the importance of flexibility.

What happens next

- 21 April 2026: Online workshop. Elexon will gather stakeholder views on what a flexibility coordination roadmap should cover and where BSC settlement rules create barriers to cross-market participation.

- Post-workshop: Expect Elexon to publish a summary of findings and a draft roadmap scope, likely Q2-Q3 2026. This will identify specific BSC modifications or data-sharing arrangements that need to change.

- BSC modification process: Any concrete changes will follow the standard BSC modification route — proposal, workgroup assessment, industry consultation, Ofgem decision. Lead time from proposal to implementation is typically 12-18 months for substantive changes.

- Watch for interaction with NESO's market platform work and Ofgem's REMA conclusions. If REMA lands on a locational pricing model, the entire flexibility coordination framework changes because locational signals would do much of the coordination that currently requires administrative rules. Elexon's roadmap may need to account for a world that does not yet exist.

- Practical impact timeline: For market participants, nothing changes in 2026. The value of engaging with this workshop is influencing the direction before it hardens into formal modification proposals. Once a BSC modification enters the workgroup process, the scope for shaping it narrows considerably.