Flexibility Does Not Need to Be Perfect to Be Dependable

There is a reasonable question at the centre of New Zealand’s flexibility discussions: can it be counted on when it is needed?

Cortexo Managing Director Terry Paddy has described the concern clearly: “Utilities want to be really certain that when they access flexibility, it’s going to be there and deliver the job it’s being asked to do.”

That confidence matters. Networks and system operators cannot plan around a service without knowing whether it can deliver the required result. But certainty does not have to mean that every flexible asset responds identically every time.

Perfection is about every individual asset responding. Dependability is about whether the promised service is delivered.

That distinction matters as New Zealand considers how flexibility can be used alongside, or instead of, traditional network and system solutions.

How much certainty does flexibility really need?

The Electricity Authority’s recent flexibility workshops explored this question directly.

It suggested that system operators can judge flexibility by whether its combined response is consistent enough for the service required, rather than expecting identical asset performance.

New Zealand already uses this principle.

Hot-water control has supported the electricity system for decades. An individual hot-water cylinder may not always respond exactly as expected, but the combined behaviour of a large and diverse group can still produce a reliable system-level result.

This is not an argument for lowering performance standards. It is an argument for setting the right standard for the service being provided.

Aggregation changes what needs to perform

Aggregation allows many individual resources to be combined and offered as one flexibility service.

The availability of an EV charger, battery or controllable load may change because of its state of charge, operating conditions, customer requirements or technical constraints. Aggregation allows those differences to be managed across the wider portfolio.

The buyer can then assess the capability and performance of the combined service, rather than requiring identical performance from every device behind it.

This is already reflected in established flexibility markets.

The Energy Networks Association’s standardised settlement methodology in Great Britain defines a Flexible Unit as one or more energy resources that are aggregated and treated as a single entity. Contracted capacity, delivered capacity and performance can then be assessed at the level of that unit.

Aggregation does not remove performance risk. It gives suppliers a practical way to manage and price that risk across a portfolio, through forecasting, conservative offers, reserve capacity and a mix of resources with different operating patterns.

The network does not necessarily need certainty from every device. It needs confidence in the result delivered by the portfolio.

The supplier or aggregator is responsible for managing the resources behind that commitment.

Different services need different levels of certainty

New Zealand industry stakeholders broadly agree that flexibility should not be treated as one product with one universal performance standard.

• An emergency response needs speed, strong confidence and clear verification.
• A local network constraint requires the right amount of flexibility in the right place, for the required period.
• Peak-demand reduction needs a measurable response during a defined window.
• EV charging or industrial load shifting may allow more freedom over when individual assets respond, provided the required energy use is completed within the wider timeframe.
• Network planning may rely more on accurate visibility and forecasting than immediate control.

Dependability should be defined by the job flexibility is being asked to do.

Applying the strictest possible requirement to every use case would increase costs, restrict participation and risk ruling out useful flexibility before it has been properly considered.

Confidence comes from clear service design

Confidence does not come from assuming an aggregated portfolio will perform. It comes from agreeing what the service needs to deliver and how that delivery will be assessed.

The buyer and supplier need to be clear about where and when the flexibility is required, how much is needed, how long the response must last, how it will be activated and measured, what tolerance is acceptable, and how under-delivery will be treated.

These are familiar requirements in more established flexibility arrangements.

The UK Energy Networks Association methodology covers contracted capacity, availability windows, metered delivery, performance tolerances and payment adjustments. Cortexo has also previously argued that a functioning flexibility market needs clear product specifications, performance requirements, commercial terms and testing.

The goal is not to remove every uncertainty. It is to make the remaining uncertainty visible, measurable and appropriately managed.

H2: What the Evnex test showed

Cortexo’s recent emergency load shedding test with Evnex provides a practical example of a portfolio-level response.

A simulated emergency signal was passed from the Transpower connection point within Flexviz to Evnex. Evnex then temporarily reduced charging demand across participating chargers in its New Zealand network.

The result was a visible reduction of around 3 MW across roughly 1,000 chargers, with the response occurring over a few seconds.

The useful measure was not whether each charger delivered precisely the same response. It was whether the connected fleet received the signal and produced a clear, coordinated and measurable reduction.

As Terry said: “It shows that we’re not just talking about what flexibility can do. We actually did it.”

This was a controlled test, not a live emergency activation by Transpower. But it demonstrated that a distributed portfolio could respond through an end-to-end technical pathway and produce a measurable system-level result.

Confidence grows through use

New Zealand does not yet have extensive performance histories across every flexibility use case, location and asset type.

That creates a familiar market problem. Buyers want evidence that flexibility will deliver before relying on it, while suppliers need a reason to invest in connecting, aggregating and making more capacity available. Without real opportunities to participate, it is difficult to build the evidence buyers are seeking.

Some of the infrastructure needed to break this cycle is already taking shape. Our Energy’s Localflex marketplace is doing an excellent job of providing a practical market for flexibility, from onboarding and procurement through to verification and settlement. It works hand in hand with Flexviz’s dynamic dispatch capability. Localflex provides the commercial pathway for flexibility to be bought and settled, while Flexviz provides the real-time technical pathway needed to activate the agreed response.

Together, these capabilities help create the real market activity needed to build confidence. Early procurement generates performance data. That data improves forecasting and helps suppliers make firmer offers. Better offers build buyer confidence, while commercial demand encourages more resources to connect.

As Terry has put it: “If networks want certainty, they have to start rewarding or putting money on the table to entice flex out of the woodwork.”

Early volumes may not solve every network problem. They do not need to. Starting with useful capacity today gives the sector the experience needed to build larger and more reliable portfolios tomorrow.

Or, more simply: “If we start paying for it, more will come.”

Define the need, describe the capability, connect the two

For flexibility to become a dependable part of electricity system planning and operation, both sides need to be clear about what they require and what they can provide.

Networks and other flexibility buyers need to describe the outcome in usable service terms: where, when, how much, for how long and with what level of confidence.

Flexibility suppliers need to describe what their portfolios can provide, under what conditions and how delivery can be measured. Flexviz can support the connection between these two sides.

It gives flexibility suppliers a way to make distributed capability visible and provides a technical pathway through which networks and system operators can communicate with connected resources.

Visibility alone does not guarantee performance. But without visibility, communication and measurement, performance cannot be properly understood or improved.

Flexibility does not have to imitate conventional infrastructure in every respect before it can deliver value. It needs a clearly defined job, an appropriate performance requirement and evidence that the promised service can be delivered.

That is what makes flexibility dependable.

Terry Paddy
Managing Director, Cortexo Limited