Ofgem Expedites FMAR Launch to Support Energy Flexibility

12 Mar

As the UK accelerates its transition to a low-carbon energy system, flexibility has become a critical tool for maintaining grid stability, managing demand, and optimizing the use of renewable energy. Ofgem’s recent decision to fast-track the Flexibility Market Asset Registration (FMAR) system underscores the growing importance of energy flexibility in ensuring a resilient and efficient electricity network.

What is Energy Flexibility and Why Does it Matter?

Traditionally, electricity systems operated in a one-way flow, where centralized power stations generated electricity and distributed it to homes and businesses. However, with the introduction of electric vehicles and the rise of renewable energy sources, the power system now functions as a two-way network—where consumers can generate, store, and even return electricity to the grid.

Energy flexibility refers to the ability to adjust electricity consumption or generation in response to real-time grid conditions. This ensures that supply and demand remain balanced, preventing blackouts and reducing reliance on costly fossil fuel-based backup generation.

According to Government estimates, effective use of energy flexibility could save the UK between £30-70 billion in system costs from 2020 to 2050, ultimately leading to lower electricity bills for consumers.

How Energy Flexibility Works in Practice

There are several ways that flexibility is incorporated into the grid:

1. Demand Response & Smart Energy Use

Businesses and households can shift their electricity consumption to times when demand is lower or renewable energy generation is higher.
Programs like the Demand Flexibility Service (DFS) incentivize consumers to reduce power usage during peak hours in exchange for bill savings.

2. Energy Storage & Battery Technology

Battery storage systems help capture surplus renewable energy and release it when needed, improving grid stability.
Large-scale battery projects, as well as domestic energy storage (such as home battery systems paired with solar panels), play a key role in balancing supply and demand.

3. Virtual Power Plants (VPPs) & Aggregators

Virtual Power Plants combine multiple decentralized energy resources (like EV chargers, home solar panels, and battery storage) into a single controllable unit.
Aggregators help businesses and households sell their flexibility services to the grid, unlocking new revenue streams.

Ofgem’s FMAR Initiative: A Game-Changer for Flexibility Markets

Recognizing the need for a more streamlined flexibility system, Ofgem has accelerated the launch of the Flexibility Market Asset Registration (FMAR) system, moving its rollout to 2027 instead of 2028.

What is FMAR?

FMAR is a centralized registration system designed to simplify and standardize the way flexibility providers (such as battery operators, aggregators, and virtual power plants) register their assets to participate in flexibility markets.

How Does FMAR Help?

One-Stop Registration: Currently, flexibility providers must register their assets separately with multiple platforms. FMAR will consolidate this process into a single entry point, reducing administrative burden.
Faster Market Access: With over 20 different flexibility markets in the UK, FMAR will make it easier for providers to participate, accelerating the growth of energy flexibility.
More Consumer Choice: The system is expected to increase the availability of flexible tariffs, allowing more households and businesses to benefit from energy savings.

Many energy startups and aggregators have voiced their support for FMAR, recognizing its potential to remove market inefficiencies. Lina Drozd, Founder of Attune Energy, highlights its importance:

“As an aggregator registering assets in multiple markets across DNO and National Grid flexibility markets, we strongly advocate for the rapid implementation of FMAR. Currently, we prioritise registration in markets with high revenue; however, FMAR will remove that barrier and allow swift participation across all markets.”

Concluding Remarks

As the UK’s energy system undergoes rapid transformation, flexibility is no longer optional—it’s essential. By shifting away from a rigid, one-way power grid and embracing smart, responsive energy management, the UK can reduce costs, improve efficiency, and integrate more renewable energy.

Ofgem’s FMAR initiative marks a major step forward in simplifying market participation, unlocking new opportunities for businesses and consumers alike. As flexibility markets continue to evolve, more accessible and efficient systems will be key to ensuring a stable, cost-effective, and low-carbon energy future.

Sandra Hu