Network operator Western Power Distribution is to lead the EQUINOX project on flexibility from residential heating.
The project, which launches in March, is planned to develop the commercial arrangements and supporting technologies for flexibility from what is expected to become a major source of new electricity demand as residential heating is electrified.
The GB government has announced a plan to reach 600,000 heat pump installations per year by 2028, which would otherwise require significant network reinforcement.
The project has got the go ahead with the recent award of £6.98 million ($9.5 million) from Ofgem from its Network Innovation Competition funding. The project running through December 2025 has a total cost estimated at £15.4 million ($20.8 million).
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Project EQUINOX (Equitable Novel Flexibility Exchange) is developing three novel commercial methods that are designed to maximise participation in domestic flexibility services. These methods are aimed to demonstrate how varying risk/reward frameworks between network operators, suppliers and customers can influence the amount, cost and reliability of flexibility from portfolios for varying customer segments including the fuel poor and vulnerable.
The methods are ‘Save in advance’ and ‘Save as you go’, with the third ‘Save in advance & boost as you go’ combining aspects of both the first two.
In ‘Save in advance’ the energy supplier, and in turn the end-customer, receive an upfront flexibility payment in return for offering a fixed, minimum obligation of flexibility.
In ‘Save as you go’ the energy supplier, and in turn the end-customer, are not committed to a fixed, minimum obligation but instead have more control over the flexibility they offer based on (near) real-time price signals.
The EQUINOX solution once implemented is expected to result in significant financial, capacity and carbon benefits. Across GB by 2050 these benefits could amount to £1.1 billion ($1.48 billion) in direct financial benefits, 779MVA of capacity released in the form of demand reduction and 1,900t of CO2e savings.
In addition, it should support the faster adoption of heat pumps by reducing the total cost of ownership through the incentives to shift electricity usage.
Partners in the project include SP Energy Networks, renewable energy supplier Octopus Energy, home energy service provider PassivSystems, Guidehouse, home developer Ser and the Welsh Government and West Midlands Combined Authority.