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      In support of Irelands Climate Action Plan (CAP) target of 20-30% flexible demand by 2030,  ESB Networks has published a notice on the establishment of a qualification system for the procurement of Demand Flexibility services.

      Providers of such services can secure long term contracts and will be paid for altering their demand or generation in response to a pre-agreed schedule, for the purpose of distribution network management and carbon abatement.

      This can be achieved by providers reducing their demand, running generation or discharging from batteries which are connected to the distribution network. This is a very positive development for both corporate large energy users and asset developers capable of providing flexibility services.

      Our Energy, Utilities and Telecoms team look at the details and timelines below.

      Procurement details

      ESB Networks will identify network locations across the country that will benefit from the provision of Demand Flexibility. The identified needs for demand flexibility are location-specific, which means that procurement of demand flexibility and contracting must also be location-specific.

      It is likely that demand flexibility will be procured through a number of procurement batches, allowing for the procurement approach and contracts to be refined based on market responses or other information arising. ESB Networks has published a list of multiple locations where demand flexibility is required.

      When the Qualification system is established from time-to-time ESB Networks will invite bids to be submitted for these locations while noting that demand flexibility would be procured only at the subset of locations with the most economically advantageous bids.

      Qualification system members are not obliged to submit tenders for all locations and can submit a tender response for only one or any number of locations noting that tenders for each location will be assessed on a standalone basis.

      Qualification will be a rolling qualification system under a defined budget and applicants must have passed the Qualification System Questionnaire to receive the Call for Tender. The Qualification System will remain open for any future Call for Tenders for the Services and within the defined budget. 

      Existing and new assets both welcome

      It is not a pre-requisite for applicants to have an already existing asset in operation. Applicants can secure a contract at the Call for Tender stage of the procurement process by demonstrating an ability to build an asset by a latest date specified by ESB Networks that can meet the congestion management requirements at a particular location over the course of a 15-year contract.

      Similarly, those applicants with an existing asset, must show that the asset will be able to sustain the required performance level for the entire duration of the 15-year contract. The specific medium-term product being procured is for demand reduction, demand shifting or an injection of power, at or near their full contracted service capacity, for a specified duration of hours in a day and across a 15-year contract.

      The services will be procured utilising ESB bespoke terms and conditions for Demand Flexibility Services in Ireland. ESB Networks is preparing a draft contract, conditions of contract and schedules that will be provided to the pre-qualified Applicants at the Call for Tender stage of the procurement process. 

      Timelines

      Final date for the submission of Qualification System Questionnaire Response by applicants, the Response Deadline is 31 January 2025.

      ESB Networks plans to notify applicants, both those who have qualified and those who have not qualified in Q1 2025 with a call for Tender issued to the qualification system members who fully qualified in Q2 2025.

      KPMG welcomes this progress in establishing a Demand Flexibility services market in Ireland which is key to achieving our renewable generation, decarbonisation and security of supply ambitions.

      Get in touch

      Do you have any queries on how your business can participate in providing Demand Flexibility services, or how this will impact your operations?

      Our Energy Advisory team has deep experience in the procurement of electricity system services in Ireland and the up-to-date market knowledge that gives you the insights required to succeed.

      Contact our team below today; we look forward to hearing from you.

      James Delahunt
      James Delahunt

      Partner, Corporate Finance, Head of Energy & Natural Resources

      KPMG in Ireland

      Terence McGovern
      Terence McGovern

      Energy and Decarbonisation Lead

      KPMG in Ireland

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