Demand Flexibility Service: NESO Asks for 500 MW and Gets 20

The service, in one paragraph

The Demand Flexibility Service (DFS) is how NESO pays households and businesses to move their electricity use at times it chooses. Suppliers and aggregators bundle their customers' flexibility into units and bid it into each event, half-hour by half-hour, at a price per MWh. NESO accepts bids cheapest first, and each accepted bid is paid its own price: DFS is pay-as-bid, so there is no single clearing price. Most events ask for turn-down (use less, usually on winter-style evening peaks); some ask for turn-up (use more, to soak up surplus renewables).

NESO publishes every requirement and every bid, accepted or rejected. We joined the two reports for every event from the first on 14 April to 11 October 2026, and built a page that analyses each one: GridHz DFS analysis. This post is what the whole six months show.

The headline numbers

Across 145 live events (104 turn-down, 41 turn-up; three test events excluded), NESO bought 13,797 MWh of flexibility for £2.45 million, an average of £177 per MWh.

The price has climbed, unevenly, as the programme has grown:

September was the busiest month on every measure. The single most expensive event was event 56 on 24 June: seven hours of turn-down from 16:00, 375 MWh at an average of £371/MWh, £139,000 in one evening.

The requirement is not the constraint

Almost every turn-down event asks for 500 MW in every half-hour. In the median half-hour, NESO accepted 19 MW. In the best 10% of half-hours it got 58 MW or more, and the most it has ever bought in a single half-hour is 185 MW. Across the programme, the energy accepted comes to under 5% of the energy NESO asked for.

That shortfall is not NESO turning flexibility away. Of the 17,064 MWh offered into turn-down events, NESO accepted 81%. The service is short of supply, not short of demand: if providers offered more at today's prices, NESO would take most of it.

Participation per event is thin too. A typical turn-down event has 10 providers eligible and 5 who bid, and NESO usually gives about five hours' notice (almost every event is announced between 12:00 and 12:15 for an evening window, most often 17:00–22:00).

NESO's walk-away price

If NESO takes most of what is offered, why is anything rejected? Because NESO stops at a price. In every half-hour of every event so far, each rejected bid was priced above the dearest bid NESO accepted. None was turned away while cheaper.

NESO doesn't publish that limit, but the bids bracket it. In the 273 turn-down half-hours where NESO both accepted and rejected bids, the dearest accepted bid had a median of £175/MWh and the cheapest rejected bid a median of £200/MWh, so the limit typically sits somewhere in that £25 gap.

It is not a fixed number. The dearest accepted price ranges from about £120 to £238/MWh across events (10th to 90th percentile), and in one turn-down half-hour in five NESO accepted nothing at all, even though the cheapest offer in those half-hours was a median £140. That fits a limit that moves event by event, consistent with NESO comparing DFS with what else it could buy for the same half-hour, though NESO doesn't publish how it sets it.

For a provider, this is the useful number: if you bid above the dearest accepted bid, you were priced out, and the gap tells you by how much. The DFS page shows that range for every half-hour of every event.

Turn-up barely exists yet

The 41 turn-up events, mostly around midday when solar output peaks, have bought 29 MWh in total, for £1,596. In 326 of their 360 half-hours NESO accepted nothing. The median turn-up event attracts one bidding provider, gets about an hour's notice, and the bids it takes are cheap: £19 to £80/MWh.

Asking households to use more power at short notice on a sunny afternoon is a harder sell than asking them to use less at teatime, and so far the market reflects that.

Two providers, 88% of the money

Eighteen providers have won something, with 107 units between them, but the revenue is highly concentrated:

Infinis alone has delivered 62% of all accepted energy, at a lower average price than the field. With pay-as-bid, a provider that bids below NESO's limit is accepted at its own price; there is no clearing price to lift it. Bidding cheaper wins volume and costs margin, and the two largest providers have struck that balance differently.

Location is concentrated too. NESO publishes DFS zones by number only. Zone 6 has supplied 39% of all accepted energy, and zones 12, 10 and 5 most of the rest. NESO can cap or exclude zones per event, and 45 of the 104 turn-down events excluded zones 1 to 3 entirely.

What to watch this winter

• Volume. The requirement is already far above what is offered. Watch whether winter peaks bring in more providers and whether accepted MW per half-hour climbs out of the tens.
• The walk-away price. September's £202/MWh average was the highest yet. If NESO's limit tracks the cost of its alternatives, a tight winter should push it up, and the gap between accepted and rejected bids will show it first.
• Concentration. Watch whether the long tail of providers, most of them earning under £15,000 in six months, grows its share or whether DFS stays a two-provider market.

Every event, every half-hour's merit order and every provider's bids are on the GridHz DFS analysis page, updated as NESO publishes.

Method and caveats

• Data: NESO's DFS requirements and utilisation reports, events 1–149 (delivery 14 April – 11 October 2026). Events marked as tests by NESO (105, 117, 120) are excluded from the totals.
• Costs are accepted MW × half an hour × bid price. Providers are settled on measured delivery, so actual payments can differ.
• Fill compares accepted MWh with the requirement NESO published for each half-hour.
• NESO's limit is our inference from the published bids (dearest accepted vs cheapest rejected in each half-hour), not a figure NESO publishes.

Supported by National Energy SO Open Data.