UK Energy Shift Advancement: Over 300MW of collective energy assets to enter Balancing Mechanism for system stabilization
The Department for Transport (DfT) has launched a grant for state-funded schools and education institutions to procure and install chargepoints on-site, marking a significant step towards facilitating easier and more convenient access to electric vehicle (EV) charging for everyone [1]. Meanwhile, the government and energy regulator Ofgem are implementing urgent reforms to the grid connection process, aiming to prioritise viable projects aligned with the UK’s strategic energy needs [2].
Recent updates on the UK’s electricity market reforms relevant to the net zero transition include significant changes to the Balancing Mechanism (BM), Electricity System Restoration Standard (ESRS), and supply chain contract rules.
The mandatory participation threshold in the BM is being lowered, enabling smaller assets, such as small-scale batteries and generation/storage projects, to participate in balancing the system. This reform aims to harness more flexibility from smaller-scale resources, which were previously excluded due to size limits [1][3][5].
While explicit recent changes to the ESRS are not directly cited, the overarching market and network reforms—including the Strategic Spatial Energy Plan (SSEP), planning reforms, and network buildout—aim to strengthen system resilience and flexibility consistent with restoration and reliability needs in a decarbonized system [1][4].
In terms of supply chain contract rules, Ofgem has approved NESO’s "first ready, first connected" reforms to prioritize viable projects aligned with the UK’s strategic energy needs, ensuring that inactive or “zombie” projects no longer hold up connection queues [2]. There is also an ongoing end-to-end review of the connections process to improve service quality, transparency, and timeliness for all sizes of connections [2].
Additional related reforms include the introduction of the Strategic Spatial Energy Plan (SSEP), slated for publication in 2026, which will coordinate spatial planning of electricity and hydrogen infrastructure to optimize system investments and reduce constraint costs [1]. The RIIO-ET3 price control period for Electricity Transmission will oversee the largest capital spending surge in the sector’s history (potentially up to £80bn) to develop a resilient grid supportive of net zero goals and energy security [4].
National Grid welcomes the government's Transmission Acceleration Action Plan, which recognizes the importance of supply chain certainty in reaching net zero [5]. The ESRS sets requirements for the restoration of Great Britain's power grid, including restoring 60% of demand on the transmission network within 24 hours and 100% within five days [5]. National Grid has called for changes to supply chain contract rules to meet the long-term demands of a decarbonised power system [5].
In the EV charging sector, up to 300MW of aggregated assets will be admitted into the Balancing Mechanism, including EV chargers and electric heating systems [1]. Five local authorities have received £14.2 million of funding from the £381 million Local Electric Vehicles Infrastructure (LEVI) Fund for charging projects [1].
To address the skills shortage in the sector, National Grid has called for increasing the UK’s manufacturing capability and has suggested the government introduce targeted incentive packages for clean energy manufacturers [5]. The National Grid Electricity System Operator (ESO) has decided to relax operational metering requirements for 1MW assets, while recommending that the government allow 10-year guarantees in supply chain contracts to build up a reserve of capacity for vital equipment [5].
These collective reforms are designed to facilitate a cleaner, more flexible, and fair electricity system in Great Britain, supporting the transition to net zero by enabling a wider range of technologies and addressing network constraints efficiently [1][2][3][4][5].
The industry and finance sectors collaborate in the implementation of the "first ready, first connected" reforms, prioritizing energy projects that align with the UK's strategic energy needs. The energy sector, meanwhile, is impacted by the lowering of the mandatory participation threshold in the Balancing Mechanism, opening opportunities for small-scale batteries and generation/storage projects.
