Ofgem Approves NESO Demand Flexibility Service Derogation Amendments
Summary
Ofgem has approved amendments and an extension to the derogation for the National Energy System Operator's (NESO) Demand Flexibility Service (DFS). This decision allows NESO to continue operating its balancing energy product under specific regulatory conditions.
What changed
Ofgem has approved amendments and an extension to the derogation for the National Energy System Operator's (NESO) Demand Flexibility Service (DFS), a balancing energy product. This decision, made under Article 6(14) of the Electricity Regulation, permits NESO to continue operating the DFS under specific conditions, amending a previous derogation provided under Article 6(4).
This approval means that the existing derogation for the DFS is extended and modified. Regulated entities involved in the energy market, particularly those interacting with NESO's balancing services, should note the continued operation of this product under the amended terms. No new compliance actions are immediately required for most entities, but awareness of the continued operation and specific conditions of the DFS is advised.
Source document (simplified)
Derogation under Article 6(4) of the Electricity Regulation for NESO’s Demand Flexibility Service 2026
Publication type: Decision Publication date:
25 March 2026
Topic: National Energy System Operator (NESO) Subtopic: Balancing supply and demand Print this page
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- This letter sets out our decision to approve amendments and extension to the derogation for the Demand Flexibility Service, in accordance with Article 6(14) of the Electricity Regulation.
On 30 January 2026, we received a proposal from National Energy System Operator (NESO) to extend and amend a derogation provided under Article 6(14) from a requirement of Article 6(4) of Regulation (EU) 2019/943 (the Electricity Regulation), as amended by The Electricity and Gas (Internal Markets and Network Codes) (Amendment etc.) (EU Exit) Regulations 2020 for its Demand Flexibility Service (DFS), a balancing energy product.
Documents
Demand Flexibility Service A6(4) Derogation 2026 [PDF, 116.61KB] Print this page
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