This opportunity is closed for applications

The deadline was Friday 12 August 2022
Ofgem

Ofgem 2022-095 Digital Design - System Flexibility Exchange

3 Incomplete applications

1 SME, 2 large

10 Completed applications

6 SME, 4 large

Important dates

Published
Friday 29 July 2022
Deadline for asking questions
Friday 5 August 2022 at 11:59pm GMT
Closing date for applications
Friday 12 August 2022 at 11:59pm GMT

Overview

Off-payroll (IR35) determination
Contracted out service: the off-payroll rules do not apply
Summary of the work
This piece of consultancy work is to provide advisory consultancy into the design possibilities for a new piece of digital infrastructure integrating a range of energy markets into a common industry wide interface, referred to as the System Flexibility Exchange (SFE).
Latest start date
Monday 5 September 2022
Expected contract length
The work is expected to last 8 weeks.
Location
No specific location, for example they can work remotely
Organisation the work is for
Ofgem
Budget range
The total overall budget is under £150,000.

About the work

Why the work is being done
This piece of consultancy work is to provide advisory consultancy into the design possibilities for a new piece of digital infrastructure integrating a range of energy markets into a common industry wide interface, referred to as the System Flexibility Exchange (SFE).

We require credible advice to develop the SFE forward. We expect the successful consultant to provide this advice, and that the outputs of this project will be used in a public Call for input document, which will gauge industry appetite for the SFE.

The consultancy work will develop the existing concept, defining key digital design decisions and criteria, and associated recommendations to develop the SFE.
Problem to be solved
There is a clear gap in existing energy market coordination and, despite their growth, DER remain largely absent from these markets.

Decentralisation offers an industry-defining opportunity for DERs. Their impact will be tremendous: if distributed energy resources (DER) are ‘dumb’ parasitic loads, we will need billions of £ investment in both baseload generation and network carrying capacity. In short: our supply will be less secure, bills will increase further, and our emissions and embedded carbon will rise. If their inherent smart capabilities can be engaged and incentivised, there are major optimisation opportunities.

We believe there is a requirement for a clear vision of coordination from Ofgem.

The proposed SFE is new digital infrastructure that allows multiple energy markets to function in coordination, provides a ‘single source of truth’ on DER positions and actions, and provides appropriate governance and trust to deliver a coordinated array of markets.

The SFE is a possible solution to an existential problem and warrants further investigation to test if and how such a proposition could function.
Who the users are and what they need to do
The flexibility exchange is the digital infrastructure that will allow users to:

Market operators:
Energy markets will be able to be fully visible on the flexibility exchange, allowing for deeper liquidity, price discovery, and synergies across markets. Market operators will have a clear governance structure for their operations, allowing for market confidence.

Buy side:
Buyers will have access to deep and liquid markets. Buyers will be able to access energy services, understanding multiple market positions, though the ‘single source of truth’ flex exchange.

Sell side:
Energy market participants will have a single authentical and registration to the flexibility exchange, reducing barriers to all market entry. Digital contracts will enable the sellers to easily access multiple markets.

Observer level:
Government will be able make informed decisions to support energy markets based on transparency of the flexibility exchange. Financial investors will have access to relevant data to enable make informed choices on market support.
Early market engagement
Any work that’s already been done
In our concept paper. an early-stage thinking and vision seeks to link digitalisation and decentralisation, and cuts right across the electricity sector. It combines existing and future work into a concept that we can share.

Within the new concept of a Flexibility Exchange, we envision utilising a layered power system architecture approach. It spells out each layers’ roles and value and demonstrates that an Exchange could provide additional context and rationale for other future data initiatives.
Existing team
You will work with the Distribution Flexibility and Enablers team and the wider Digitalisation and Decentralisation portfolio as and when required.
Current phase
Discovery

Work setup

Address where the work will take place
Our offices are based in London, Glasgow, and Cardiff. Work can take place predominantly remotely. We expect to convene the kick-off meeting, close-out meeting, and periodic workshops in person in London.
Working arrangements
Work can take place predominantly remotely. We expect to convene the kick-off meeting, close-out meeting, and periodic workshops in person in London.
Security clearance

Additional information

Additional terms and conditions

Skills and experience

Buyers will use the essential and nice-to-have skills and experience to help them evaluate suppliers’ technical competence.

Essential skills and experience
  • Experience in assessing and advising digital solutions for complex data platforms
  • Experience in designing digital architecture for data exchanges
  • Understanding 'single-source of truth' digital platform/exchange design
  • Knowledge of futureproofing digital designs for existing and new platforms
  • Understanding of stakeholder and user experience
  • Experience of organising and leading workshops with industry experts
  • Experience of producing high quality, high impact reports and briefs, and workshops
  • Demonstrable experience in creating high quality graphics to effectively portray complex digital design options in unambiguous language and visuals.
Nice-to-have skills and experience
  • Knowledge of optimisation of an energy system to address the energy trilemma
  • Knowledge of how customer-owned smart devices can impact and influence the energy system
  • Knowledge on how to derive value and reduce risks from proliferation of smart DER entering the energy system
  • Knowledge of how to digitalise energy markets utilising a layered power system architecture approach

How suppliers will be evaluated

All suppliers will be asked to provide a written proposal.

How many suppliers to evaluate
3
Proposal criteria
  • Approach and Methodology
  • Digital Platform and Exchange Development Expertise
  • Experience of Designing New Digital Infrastructures
  • Energy Market and Energy Flexibility Expertise
  • CVs and Team Structure
  • Commercial - Total Tender Cost
Cultural fit criteria
  • Demonstration of transparency and collaboration when making decisions
  • Demonstration of remaining open and encouraging further exploration to consider all avenues
  • Demonstration of ability to work with stakeholders from varying sectors and levels of expertise to communicate content in different mediums and levels of technicality
Payment approach
Fixed price
Additional assessment methods
Evaluation weighting

Technical competence

75%

Cultural fit

5%

Price

20%

Questions asked by suppliers

1. What is the timeline for shortlisting, further competition and award?
The indicative timeline for shortlisting, further competition and award is as follows:

Digital Marketplace Submission return deadline: 12th August 2022
Evaluation of Digital Marketplace submissions: 12th August - 19th August 2022
Issue Invitation to Tender via myTenders: 19th August 2022
Deadline for questions/clarifications: 23rd August 2022 BEFORE 12 noon
Submission return deadline: 26th August 2022 BEFORE 12 noon
Tender submission review period: 26th – 2nd September 2022
Award of Contract (provisional): 7th September 2022
Contract commencement (provisional): 12th September 2022

For flexibility, please ensure that you are able to resource the contract from 5th September 2022.
2. Were any external suppliers involved in developing the concept paper?
No. The concept paper was developed by Ofgem. A copy of the concept paper will be appended to the full tender.
3. When a criterion asks for the supplier’s ‘knowledge’ or ‘understanding’, should suppliers be using an example to demonstrate this, or is the Buyer expecting a different approach?
Examples are welcome. The vendor may also demonstrate understanding through their commentary and response to questions.
4. Please can you confirm that our answers will be kept confidential – i.e. not shared with other suppliers?
Questions received from suppliers are anonymised by the Digital Marketplace. Therefore, we are unable to directly respond to suppliers to maintain confidentiality.

The Digital Marketplace also requires that we publish all questions received, to ensure that all questions and answers are visible to all potential suppliers.
5. Are suppliers permitted to use multiple examples in their responses to questions?
Suppliers are welcome to respond to the question using the example/s that they feel best demonstrates their competence. Multiple examples are permitted.