Grid services and virtual power plants: letting someone else use your battery

Two different things with one name

“Virtual power plant” gets used for arrangements that differ in what you actually give up.

Tariff-led. Your supplier offers a cheaper or better-paying tariff on the condition that it can shift when your battery charges. You keep the asset, and the control is exercised through the tariff.

Aggregator-led. A third party enrols your battery into a fleet and dispatches it into electricity markets. This is the arrangement MCS’s disclosure requirement is aimed at, and the one where the exit terms matter most.

Both may involve the same underlying national scheme. The difference is who holds the contract with you and what they can do without asking.

The national scheme underneath: the Demand Flexibility Service

NESO — the National Energy System Operator — runs the Demand Flexibility Service. It began as a winter measure for 2022/23 and, on 27 November 2024, became a year-round service.

How households take part, from NESO’s own explainer:

• through a registered provider, not directly with NESO. NESO maintains a list of registered providers.
• a smart meter is required. NESO’s explainer states it is needed because it allows electricity use to be measured accurately during events.
• rewards vary. NESO says the type and value of rewards depend on the provider you are signed up with, and publishes no household figure.

On 9 April 2026 the service changed in ways that matter to storage. NESO’s page describes bi-directional flexibility, zonal procurement across 12 zones, an eligibility threshold reduced to 0.1 MW, and new primacy and self-nominated baseline options.

What MCS requires to be told to you

This is the strongest consumer protection in this area and almost nobody knows it exists.

MCS’s battery installation standard, MIS 3012, lists in clause 4.2.1 the minimum technical information an MCS contractor must give in writing before the point that the contract is awarded. One item is specifically about third-party control: where the system is to be remotely controlled by third parties, you must be told the terms of that arrangement, including the terms applying should you wish to terminate the arrangement and assume full control of your system — and the standard says penalties for early termination shall be clearly stated.

So if a battery is being sold to you with a flexibility scheme attached, the exit terms and any early-termination penalty belong in the paperwork before you sign, not after.

The cost nobody puts on the front page

Your battery warranty is written in years, cycles and total throughput, and it ends at the first limit reached — the arithmetic is here.

A flexibility scheme spends those limits. Every dispatch is a partial cycle you did not choose. If the scheme pays £X a year and brings the end of your capacity warranty forward by a year or two, the honest calculation nets one against the other, and neither the aggregator nor the manufacturer will do it for you.

The questions that follow:

• How often, typically, will the battery be dispatched, and how deeply?
• Is there a floor on state of charge the scheme will respect, so the battery is not left empty when you need it?
• Does the manufacturer’s warranty have anything to say about third-party control?
• Who is liable if the scheme’s operation causes a failure?

What to check before signing

1. Who is the counterparty — your supplier, an aggregator, or the installer?
2. What can they do without asking, and can you override a dispatch?
3. The exit terms and any early-termination penalty, which MCS requires in writing pre-contract.
4. How payment is calculated — per event, per kWh, a flat annual fee, or a tariff discount — and whether it is guaranteed or indicative.
5. How it interacts with the battery warranty.
6. Whether it charges your battery from the grid, which engages the export payment rules if you have solar on FIT or SEG.
7. What happens if you move house, or change supplier, or the scheme closes.

Our position

We are not against these schemes. Flexibility is genuinely valuable to the system, paying households for it is a reasonable way to buy it, and a battery sitting idle 300 nights a year is an asset doing nothing.

What we object to is a payment figure quoted without the cycle cost, the exit terms, or the warranty interaction beside it. The standard already says those things must be disclosed before the contract is awarded. Holding an offer to that is not an unreasonable ask.