The key to unlocking power system flexibility: behind the meter or front of the meter?

As we laid out in a previous blog post (https://www.edfenergy.com/wholesale-market-services/blog-how-role-technology-changing-optimisation), the complexity and intricacy of the GB power market is increasing exponentially as the fleet of large, conventional thermal generation is slowly replaced by smaller generators and storage systems, such as PV installations, wind farms and grid-scale lithium-ion batteries.

The GB power market has hit the headlines in Jan ‘25 as a cold snap exacerbated a tight system, causing power prices to spike. The spotlight has been on the industry to explain how and why these events happen. One component of reducing the impact of these tight days is to fully utilise the available flexibility on the system. 

Flexibility in the GB power grid can be divided into 2 broad categories: front-of-the-meter (FtM) and behind-the-meter (BtM). As we will explore in this blog post, each of these types of flexibility has its own role to play in the efficient functioning of a modern, decarbonised power system.

Front of meter

 Front of the meter flexibility refers to the ability of assets which are connected directly to the grid to operate flexibly, either around price signals or to obey instructions from the system operator. Generally speaking, these are the assets which the system operator (NESO) has the best visibility of and can utilise to balance the grid.

Examples of FtM assets include:

• Utility scale renewable energy installations – wind and solar farms
• Hydropower plants
• Nuclear power plants
• Large scale battery energy storage systems (BESS)

FtM assets have varying flexibility capabilities. For example, wind and solar assets are restricted to turn-down flexibility, as they are restricted by the prevailing weather conditions. Strict safety protocols surrounding nuclear assets restrict generation flexibility. However, other asset classes such as BESS are perfectly suited to supporting the grid with the ability to charge and discharge power at any time of day.

Benefits of FtM flexibility:

• Enhanced grid stability and reliability: particularly via the procurement of ancillary services, FtM assets are crucial to maintain the frequency and voltage levels across the grid.
• Improved efficiency in power generation and distribution: a greater level of flexibility across the entire grid allows for the efficient use of existing infrastructure and can delay the requirements for costly grid upgrades.
• Decarbonisation of the power sector: flexible assets are essential to allow for the continued penetration of renewables in the GB grid. Storage assets and other fast-responding flexible assets (such as gas peakers) are able to respond quickly to unexpected deviations in renewable output. As the number of renewable assets, along with the forecast error, increases, so too does the requirement for these fast-responding generators. Investment will also be required in longer duration storage assets to be able to provide power during periods of low renewable output.
• Asset monetisation: markets which explicitly monetise flexibility, such as the ancillary service markets, provide additional revenue streams for new assets, stimulating investment in new, low carbon technologies. The frequency response services in GB have been of particular importance historically and have supported GB in becoming one of the most mature global BESS markets.

Key challenges of utilising FtM flexibility:

• Technical complexity: the interoperability and scalability of FtM assets is extremely complex and requires advanced and reliable control systems and communication protocols. For example, the utilisation of BESS assets in the balancing mechanism in GB has required significant process and system redesign by NESO.
• Regulation & policy: While various mechanisms have been successfully implemented to support the deployment of flexible capacity on to the system in recent years, barriers remain to wider roll out.
• Forecast quality: the ability of flexible assets to respond to real time changes in supply and demand relies on accurate and data driven forecasting capabilities by asset operators. 

Behind the meter

Behind the meter assets refer to assets that are located on the consumer side of the meter. Examples of BtM assets include rooftop solar panels, residential battery storage systems or electric vehicles. The flexible utilisation of such assets allows them to support the operation of the grid via local or national grid services and provides incentives for consumers to tailor their demand profiles to avoid periods of peak demand (peak-shaving).

In recent years, the UK government has incentivised the purchase of electric vehicles, heat pumps and residential solar PV systems as part of wider plans to transition to a Net Zero economy. The increase in these BtM systems has presented the energy industry with a fascinating new challenge – how to use these assets in an optimal way when they are not under the purview of traditional asset managers and optimisers. This has led to a strong growth in companies (such as EDF) offering aggregation services, to group these small assets together and give them a route to market to provide grid services and enable load shifting.

Benefits of BtM flexibility:

• Cost savings: By generating and storing energy, consumers can utilise lower cost renewable energy and potentially avoid using energy during peak-priced hours.
• Grid support: aggregated BtM assets can provide demand flexibility services, local DNO flex services as well as national level grid services, helping to support the efficient functioning of the grid. The provision of these services also provides the consumer with additional revenue streams. Businesses with onsite generation or BtM batteries can also utilise these services to generate revenue.
• Energy transition: Exploiting the full potential of demand-side flexibility available on the grid has the potential to further reduce the reliance of the GB power system on fossil fuel generation as fossil fuels are still typically called upon to meet periods of peak demand.

Key challenges of utilising BtM flexibility:

• Initial investment: The upfront cost of installing residential BtM systems can be high, although they are usually offset by long-term savings and government support.
• Regulatory environment: the policy landscape for BtM systems is constantly changing and policy support cannot be guaranteed, given the politically charged nature of such decisions. 
• Technical complexity: the aggregation and monetisation of BtM assets is a technological challenge, requiring significant expertise and sophisticated systems and processes.

BtM asset optimisation is likely to be a key area of focus for the industry and consumers alike. Future trends to watch out for include:

• EV integration: As more and more drivers choose electric vehicles, the number of Li-ion batteries sitting on driveways will increase. This battery capacity could provide a large volume of energy storage if aggregated and optimised. 
• Growth of Virtual Power Plants (VPPs): VPPs aggregate multiple BtM systems and allow them to access markets which are not accessible for very small generators, allowing for participation in services such as peak shaving and frequency regulation.
• Advanced energy management systems: The use of artificial intelligence and machine learning is growing in both FtM and BtM industries, allowing for optimal use of the assets around forecast generation and demand patterns.

While the complexity of the network of FtM assets is increasing all the time and providing new challenges, the market is relatively mature compared to the new entrants in the BtM space, where there is significant opportunity for innovation and optimisation. The utilisation of both FtM and BtM flexibility within the grid is an intricate problem but has the potential to increase the efficiency of our power system and ultimately reduce the cost to consumers.