Rapid, Everywhere, Dependable Flexibility (RED-Flex)

Funding mechanism	Network Innovation Allowance (NIA)
Duration	Sep 2026 - Mar 2028
Estimated expenditure	£1.07 million
Research area	Optimised assets and practices

Project partners: UK Power Networks, Northern Powergrid, SP Energy Networks, Smart Grid Consultancy, Isle Utilities, Anglian Water, Thames Water, Severn Trent Water, Southern Water, South West Water, Northumbrian Water, Affinity Water and Scottish Water

Project overview

RED-Flex is a collaborative project combining the knowledge and expertise of DNOs and water companies. It will investigate whether a dependable Flexibility of Last Resort (FoLR) service could support electricity networks when contracted flexibility providers are unavailable, unable to deliver, or insufficient to meet network needs. The project will explore whether water companies could provide this service by adjusting electricity demand at suitable operational sites. It will assess the technical, operational, commercial and regulatory feasibility of the concept, quantify potential network and customer benefits, and determine whether progression to future demonstration activities is justified.

Summary

Rapid, Everywhere, Dependable Flexibility (RED-Flex) will develop the technical, operational, commercial and regulatory evidence required to determine whether a Flexibility of Last Resort service could improve confidence in the dependable delivery of flexibility within electricity distribution networks.

As Distribution System Operators (DSOs) increasingly rely on flexibility to support strategic network planning, manage constraints and facilitate low-carbon connections, there remains uncertainty around the dependable availability of flexibility services during abnormal operating conditions, low market participation or provider non-delivery. This uncertainty can result in more conservative operational and investment decisions, including over-procurement of flexibility or earlier network reinforcement than may otherwise be required.

RED-Flex will investigate whether a dependable fallback flexibility capability can provide an additional layer of operational resilience by supporting existing flexibility markets where contracted flexibility is unavailable or insufficient.

The project will not replace existing flexibility markets; instead, it will develop and assess a complementary service that improves confidence in the use of flexibility as part of strategic network planning and operation. The project will initially focus on the water sector, working collaboratively with participating water companies to assess the technical, operational and commercial feasibility of providing dependable flexibility services from water assets. Water sector assets offer a combination of operational flexibility, geographical diversity and controllable demand, making them a suitable environment for investigating the concept. The project will also consider the transferability of the proposed approach to other sectors and network applications.

Activities include evidence gathering, regulatory engagement, DSO operational assessment, service design, commercial framework development, demonstration planning and completion of a Cost Benefit Analysis. The outputs of this work will provide the evidence required to determine whether progression to operational demonstrations should proceed under a future project stage.

Key project outputs include: 

• A Flexibility of Last Resort service specification.
• Assessment of technical, operational, commercial and regulatory feasibility.
• Regulatory and governance recommendations.
• Demonstration readiness plans and supporting evidence.
• A comprehensive Cost Benefit Analysis to quantify the potential value of dependable flexibility.

The project will be delivered by National Grid Electricity Distribution (NGED), supported by UK Power Networks (UKPN), Northern Powergrid (NPg), Scottish Power Energy Networks (SPEN), Smart Grid Consultancy, Isle Utilities, and participating water companies. The collaborative approach will ensure that project outputs are informed by multiple DNOs and water companies, improving their applicability across different network areas and operational environments.

RED-Flex supports the transition towards a smarter and more resilient electricity system by addressing a recognised gap in dependable flexibility delivery. The evidence generated through this project will inform future strategic network planning, contribute to industry understanding of dependable flexibility services and provide a robust basis for deciding whether operational demonstrations should proceed.

Problem being solved

Distribution System Operators (DSOs) are increasingly relying on flexibility services to support strategic network planning, manage constraints and facilitate low-carbon connections. While flexibility markets have matured significantly, they cannot always guarantee dependable delivery during abnormal network conditions, post-fault restoration, low provider availability or market illiquidity.

This creates uncertainty in network planning and operations, reducing confidence in the dependable delivery of flexibility. As a result, networks may over-procure flexibility, retain conventional reinforcement options or bring forward reinforcement investment earlier than necessary, increasing costs and reducing the efficient utilisation of network capacity.

The issue is becoming more significant as the volume of flexibility required to support electrification, distributed energy resources and customer connections continues to grow. Greater reliance on flexibility also increases the importance of understanding and managing residual delivery risk where contracted services cannot perform as expected.

At the same time, there is no structured Flexibility of Last Resort capability that can provide a dependable fallback layer behind existing flexibility markets. This limits confidence in the wider adoption of flexibility as part of strategic network planning and operational decision making.

RED-Flex will address this gap by developing the technical, operational, commercial and regulatory evidence required to assess the feasibility of a Flexibility of Last Resort capability, initially through the water sector. The outputs will establish whether sufficient evidence exists to support progression to operational demonstrations and potential future business-as-usual deployment.

Project benefits

RED-Flex has the potential to deliver customer, financial, operational, environmental and wider industry benefits by developing the evidence required to improve confidence in the dependable delivery of flexibility services.

From a customer perspective, the project will assess how increased confidence in dependable flexibility could support more efficient use of existing network capacity, facilitating lower-cost and potentially faster connections for low-carbon technologies while maintaining network security and resilience.

The project will quantify the potential financial benefits through reduced flexibility over-procurement, more targeted network reinforcement decisions and improved utilisation of existing assets. Initial high-level analysis indicates potential benefits of approximately £4.3 million per annum across Great Britain, including around £1.3 million per annum within NGED. These estimates will be validated and refined through the project’s Cost Benefit Analysis, which will inform any future investment decision.

The principal operational benefit of RED-Flex is the development of the technical, operational, commercial and regulatory evidence required to determine whether a Flexibility of Last Resort capability can provide a dependable fallback layer behind existing flexibility markets. This evidence will support future decisions on operational demonstrations and potential deployment.

Non-financial benefits include improved understanding of dependable flexibility services, strengthened collaboration between electricity networks and the water sector, regulatory learning, and the development of a transferable service model that could be applied across other sectors and GB electricity network operators.

From an environmental perspective, the project will assess how greater confidence in the dependable use of flexibility could help defer or reduce network reinforcement, maximise utilisation of existing infrastructure and support the integration of low-carbon technologies, contributing to the transition to a net zero energy system.

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• Methods

  The RED-Flex project will develop the evidence required to determine whether a Flexibility of Last Resort service can provide a dependable fallback capability behind existing flexibility markets where delivery risk is elevated.

  The project combines technical assessment, operational design, commercial framework development and regulatory engagement to determine whether a structured fallback flexibility service can improve confidence in the dependable use of flexibility within strategic network planning and operation.

  The approach builds upon existing DSO flexibility markets and operational dispatch processes but investigates a new service concept intended to support circumstances where conventional flexibility markets cannot reliably deliver, including abnormal network conditions, post-fault restoration and areas with limited provider participation.

  The project will initially focus on flexibility provided by water-sector assets, recognising their operational flexibility, geographical diversity and potential to provide dependable demand reduction. The project will assess whether this approach can be transferred to other provider types and future flexibility markets.

  The project is structured into the following work packages:

  • Work Package 1 – Project Governance and Mobilisation
  • Work Package 2 – Water Sector Evidence and Asset Assessment

  Identification and assessment of suitable water-sector assets, operational constraints and flexibility capabilities to establish the evidence base for dependable flexibility provision.

  • Work Package 3 – Regulatory Alignment and DSO Assessment

  Assessment of operational use cases, network requirements, regulatory considerations and commercial principles through collaboration with participating DNOs, Ofgem and Ofwat.

  • Work Package 4 – Service Design

  Development of the Flexibility of Last Resort service specification, including technical, operational, commercial and governance requirements together with activation criteria, dispatch principles and performance measures.

  • Work Package 5 – Demonstration Readiness and Investment Case

  Preparation of participating assets, operational processes, governance arrangements and demonstration plans to establish readiness for potential operational demonstrations. Completion of a Cost Benefit Analysis and supporting evidence to inform future work.

  Outputs from each work package will be progressively reviewed against predefined acceptance criteria through the project’s governance arrangements.

  Measurement Quality Statement and Data Quality Statement

  The project will primarily utilise existing operational, network, asset and flexibility market datasets provided by participating electricity network operators, water companies and project partners. Additional operational and asset information will be collected where required to support technical assessments, service design and demonstration readiness activities.

  The project is intended to evaluate the technical, operational and commercial viability of a Flexibility of Last Resort service and is not developing new measurement equipment or measurement methodologies. Existing operational telemetry, monitoring systems and asset information will therefore be used wherever practical to support technical assessments and service design activities.

  Data quality assessment and validation activities will be undertaken throughout the project to ensure that datasets used within technical assessments, operational evaluations and Cost Benefit Analysis activities are suitable, representative and traceable. This will include assessment of data completeness, consistency, operational relevance, temporal alignment and suitability for the intended analyses.

  All data processing, analysis, modelling and evaluation methodologies will be documented within project outputs and managed under the relevant partner quality assurance procedures. Project findings, methodologies and validation processes will be recorded in sufficient detail to support reproducibility and dissemination of learning across GB electricity network operators.

  A Data Protection Impact Assessment (DPIA) will be completed where required to assess and manage privacy risks associated with project datasets. The project will operate in accordance with applicable data protection legislation, internal governance procedures and agreed contractual data-sharing arrangements between project partners.

  Where project partners or suppliers are provided access to NGED datasets or operational information, appropriate security and information governance controls will apply, including controlled access arrangements, secure data handling procedures and relevant contractual obligations. Data will be managed using appropriate technical and organisational controls proportionate to the sensitivity of the information being processed.

  The project does not intend to publicly disclose commercially sensitive operational information or partner-specific data. Any published outputs, reports or shared datasets will be aggregated and anonymised where appropriate to ensure that commercially confidential or commercially sensitive information cannot be identified.

• Scope

  The RED-Flex project will develop the evidence required to determine whether a Flexibility of Last Resort service can improve confidence in the dependable delivery of flexibility within electricity distribution networks.

  The scope covers the development of the technical, operational, commercial and regulatory evidence required to assess the feasibility of a dependable fallback flexibility service. This includes assessment of flexibility delivery risks, evaluation of water-sector flexibility assets, development of a service specification, commercial and governance framework design, regulatory engagement and preparation for future operational demonstrations.

  The assessment will initially focus on flexibility provided by participating water companies, assessing the ability of water-sector assets to provide dependable flexibility services under representative network conditions. The project will also assess the transferability of the proposed service model across other sectors and GB electricity network operators.

  The project will:

  • Assess the technical, operational, commercial and regulatory feasibility of a Flexibility of Last Resort service.
  • Develop a Flexibility of Last Resort service specification, including technical, operational and commercial requirements.
  • Evaluate suitable water-sector assets and operational use cases.
  • Develop the governance, commercial and dispatch arrangements required to support a dependable flexibility service.
  • Complete a Cost Benefit Analysis to quantify the potential value of the proposed service.
  • Produce the evidence required to support a decision on whether future operational demonstrations should proceed.
• Expected Benefits

  For consumers

  • Improved confidence in dependable flexibility to support more efficient use of existing network capacity.
  • Potential to facilitate lower-cost network solutions and more efficient customer connections.
  • Reduced long-term network costs through better-informed investment decisions. For the electricity distribution networks
  • Development of a structured Flexibility of Last Resort service model.
  • Improved understanding of the technical, operational, commercial and regulatory requirements for dependable flexibility.
  • Evidence to support future strategic network planning and operational decision making.
  • A transferable framework that could support wider adoption across GB electricity networks.

  Financial Benefit Context

  The project represents an evidence-led investment to determine whether a dependable Flexibility of Last Resort capability can deliver value for customers and network operators. Initial high-level analysis indicates potential benefits of approximately £4.3 million per annum across Great Britain, including around £1.3 million per annum for NGED. These estimates will be validated and refined through the project’s Cost Benefit Analysis.

  Strategic Position

  RED-Flex supports the transition towards strategic network planning by improving confidence in dependable flexibility. It also aligns with the Energy Networks Innovation Challenge 5 ambition for decentralised system balancing by developing the evidence required to support dependable flexibility services.

• Objectives

  The objective of the RED-Flex project is to develop the technical, operational, commercial and regulatory evidence required to assess the feasibility of a Flexibility of Last Resort service for electricity distribution networks.

  The project will:

  • Develop a Flexibility of Last Resort service specification, including technical, operational, commercial and governance requirements.
  • Assess flexibility delivery risks and identify the circumstances in which a dependable fallback flexibility service could provide value.
  • Evaluate the suitability of water-sector assets to provide dependable flexibility services under representative operational conditions.
  • Assess DSO operational requirements, use cases and integration considerations for a Flexibility of Last Resort service.
  • Engage with Ofgem, Ofwat, participating DNOs and water companies to assess regulatory, commercial and governance requirements.
  • Develop the commercial, operational and dispatch arrangements required to support future operational demonstrations.
  • Complete a Cost Benefit Analysis to quantify the potential customer, network and financial benefits of a Flexibility of Last Resort service.
  • Assess the transferability of the proposed service model to other sectors, flexibility providers and GB electricity network operators.
  • Produce the evidence required to support a decision on whether the project should progress to operational demonstrations.
• Success Criteria

  The success of the RED-Flex project will be evaluated against the following criteria: 

  1. Technical and operational feasibility established

  • Successful development of a Flexibility of Last Resort service specification, including technical, operational and dispatch requirements.
  • Evidence that the proposed service addresses identified flexibility delivery risks and defined DSO use cases.

  2. Water-sector capability assessed

  • Successful assessment of participating water-sector assets and their suitability to support a dependable flexibility service.
  • Identification of operational opportunities, constraints and requirements for service delivery.

  3. Commercial and regulatory framework developed

  • Completion of the commercial, governance and regulatory framework required to support a Flexibility of Last Resort service.
  • Engagement with participating DNOs, Ofgem, Ofwat and project partners to inform service design.

  4. Cost Benefit Analysis completed

  • Completion of a robust Cost Benefit Analysis quantifying the potential customer, network and financial benefits of the proposed service.
  • Clear articulation of assumptions, limitations and applicability of the results.

  5. Demonstration readiness established

  • Completion of demonstration planning, governance arrangements and operational readiness activities.
  • Evidence that sufficient technical, operational, commercial and regulatory information has been developed to support potential future operational demonstrations.

  6. Transferability and scalability assessed

  • Assessment of the applicability of the proposed service model across other sectors, flexibility providers and GB electricity network operators.
  • Identification of requirements for future operational demonstrations and potential business-as-usual deployment.
• Potential for New Learning

  The project will generate learning on the feasibility of a Flexibility of Last Resort service and the role that dependable flexibility could play in supporting strategic network planning and operation.

  Learning will be generated on the technical, operational, commercial and regulatory requirements needed to establish a dependable fallback flexibility capability, including the circumstances in which such a service could provide value alongside existing flexibility markets.

  The project will also provide learning on the suitability of water-sector assets to provide dependable flexibility services, including operational constraints, service availability, dispatch considerations and the factors that influence dependable service delivery. This will help determine the extent to which the proposed approach could be transferred to other sectors and flexibility providers.

  Additional learning will focus on the development of the service specification, governance arrangements and commercial framework required to support a Flexibility of Last Resort service. This will include understanding the regulatory considerations associated with cross-sector flexibility, market integration and future operational deployment.

  The project will also generate learning through the Cost Benefit Analysis, identifying the potential customer, operational and financial value of dependable flexibility and the conditions under which a Flexibility of Last Resort capability could provide benefits to electricity distribution networks.

  The learning generated is expected to be highly transferable across GB electricity network operators because the project is focused on developing a generic service model rather than a solution specific to a single network area or flexibility provider. The outputs will provide guidance that can be applied by other Distribution Network Operators (DNOs) and Distribution System Operators (DSOs), flexibility providers and other critical infrastructure sectors.

  Learning will be disseminated throughout the project through:

  • ENA Smarter Networks Portal.
  • Project webinars and stakeholder workshops.
  • ENA Energy Innovation Summit.
  • NGED Innovation website.
  • Industry conferences and cross-sector engagement events where appropriate.

  These dissemination activities will ensure that the learning generated by RED-Flex is shared across the electricity and water sectors, supporting wider understanding of dependable flexibility services and informing future innovation, policy development and potential business-as-usual adoption.