Virtual power plant FAQs
Straight answers for teams weighing up a virtual power plant: whether flexing disrupts production, who controls dispatch, what the Capacity Market, the Demand Flexibility Service (DFS) and distribution network operator (DNO) tenders pay, and which sites and assets qualify. 17 answers across four categories, every figure taken from the published programme rates behind our service.
The basics
What is a virtual power plant?
A virtual power plant joins up lots of smaller flexible assets, batteries, EV chargers, heating and cooling, industrial loads, and runs them together so they behave like one power station the grid can call on and pay. That flexibility is cheaper and cleaner for the grid than firing up a real power plant, and NESO, the National Energy System Operator, expects flexible capacity to roughly equal UK peak demand by 2030. For the full mechanics, start with what a virtual power plant is and how it works.
Who runs the virtual power plant and who holds the market contracts?
We do. Purely Energy is the registered Capacity Provider and the contracting party with all six UK distribution networks (UKPN, ENWL, SP Energy Networks, NGED, SSEN and Northern Powergrid), plus NESO at transmission level. There is no broker handover and no aggregator middle-man on top of us: one contact, one contract, one statement. The virtual power plant hub sets out the whole offer in plain English.
How does Purely Energy get paid?
From a share of the revenue we create for you, published and agreed in writing before anything is connected, so we only do well when you do. There is no joining fee and no upfront cost: dispatch hardware is supplied and installed under our capex. Every settlement is reconciled and paid against a single monthly statement, so finance sees one clean number.
How is this different from our energy supply contract?
It sits alongside your supply contract rather than replacing it. Your supplier keeps billing you for the energy you use; the virtual power plant pays you separately for the demand you can shift or shed on the same meter. Your procurement, your supplier and your renewal dates are untouched, and the two arrangements are settled separately.
Operations and control
Will flexing disrupt our operations?
No. You define what is allowed to flex and when, and production always takes priority. Most flexing is equipment you would not notice: a cold store drifting inside its safe band, or EV charging shifting by an hour. Critical loads can be excluded outright; one hospital trust on the programme runs its 2 MW combined heat and power (CHP) engine in the Capacity Market with theatre load excluded from every dispatch sequence.
Who decides which equipment flexes, and when?
You set the rules; our 24/7 control room operates inside them. The control room registers your sites into the right markets, runs the opt-in decisions and handles every dispatch, including the 15-minute notice on dynamic DNO services. Typical events last 30 minutes to 2 hours and are opted in per window, so nothing fires outside a rule you approved.
Can we opt out of an event?
Yes. NESO's Demand Flexibility Service is opt-in day-ahead, per service window. DNO flexibility windows are pre-published, and Capacity Market stress events are rare (around one or two per winter) with at least four hours' notice. If a window conflicts with production, you sit it out and the rest of the stack carries on.
What is the annual demand side response (DSR) Test?
Capacity Market units registered as Proven DSR demonstrate once a year that they can deliver their contracted capacity. We handle the test end to end as part of the service. It applies to the Capacity Market layer only: the Demand Flexibility Service and DNO services settle on what you actually deliver in each event.
What happens if we cannot deliver during an event?
Under-delivery reduces the payment for that event. On the Demand Flexibility Service there is no contractual penalty at all: you are paid for what you deliver and not penalised for what you do not. DNO and Capacity Market contracts do carry penalty mechanisms, but those contracts are held by us as the registered provider, so managing that exposure is our job. The practical protection on your side is the opt-out: never commit a window you cannot serve.
Money
Which revenue streams can stack on the same load?
Up to four: the Capacity Market, NESO's Demand Flexibility Service, DNO flexibility tenders, and the bill-side schemes (EII, NCC, BICS and the Climate Change Levy, the schemes that cut levies and network charges for eligible energy-intensive businesses). Clients running the stack typically earn 3 to 6 times more than any one scheme alone. Each stream is broken down in our guide to demand side response revenue streams.
What do the schemes actually pay?
At the most recent auctions the Capacity Market T-1 cleared at £20 per kW per year for 2026/27 delivery, and T-4 at £60 per kW per year for 2028/29. The Demand Flexibility Service, year-round since November 2024, cleared up to £1,290/MWh on the headline winter 2024/25 event. DNO flexibility crossed 9 GW contracted in 2025 and typically pays around £50,000 per MW per year. Your assessment shows which of those rates your sites can reach.
How quickly does the first payment arrive?
The Demand Flexibility Service and DNO flexibility typically pay within 4 to 12 weeks of connection. The Capacity Market runs on annual auction timetables, so that layer takes 5 to 17 months to first revenue. The fast streams do not wait for the slow one: DFS and DNO income starts while the Capacity Market timetable plays out, then the auction layer joins the stack.
How much could our site actually earn?
It depends on the flexible load, so here are real programme examples. A 500 kW cold-storage warehouse earns around £15,000 a year stacking the Capacity Market, DFS and UKPN flexibility. An EII-eligible plastics manufacturer using 5 GWh a year saves £150,000 to £225,000 a year through EII and NCC, with the Capacity Market layered on top. To size your own number, get a flexibility assessment: it names every stream you qualify for before you commit to anything.
Eligibility and kit
How big does our site need to be?
Smaller than most people expect. DNO flexibility starts at 10 kW of controllable load per asset. The Demand Flexibility Service opens at 100 kW per unit, after the floor dropped in April 2026. The Capacity Market needs 1 MW, but that is 1 MW aggregated: we combine your flexibility with other clients to clear the threshold, so a single modest site still earns from every layer it fits.
What metering and hardware do we need?
Half-hourly metering is the one hard requirement. Where a market needs an on-site controller that can act on a dispatch signal, we supply, install and maintain it under our capex, so there is no upfront cost to you. The same half-hourly data can work harder across the rest of your energy spend through Purely Insights, our monitoring platform.
Which assets and loads qualify?
Anything that can shift by minutes or shed for a short window without hurting operations: HVAC, refrigeration, compressors, pumping, batch processes, EV charging, battery storage and CHP. The loads that do not fit are the genuinely uninterruptible ones, such as continuous chemical processes or hospital theatre load. Our guide to battery storage and asset revenue shows what each asset type can earn inside the stack.
We run multiple sites. Does that help or complicate things?
It helps. Aggregation is the point of a virtual power plant: smaller sites combine into a single Capacity Market unit to clear the 1 MW threshold, and one logistics group has EV charging across 8 depots registered as flexible load, covering £400,000 of charger capex inside 36 months through DNO Flex and DFS. We are approved with every UK DNO, so any postcode can join, and the whole estate settles on one monthly statement.
Question not covered here?
Ask us directly. A no-obligation flexibility assessment names the revenue streams your assets qualify for and sizes the income before you commit to anything. Or call 0161 521 3400 and talk it through with the team that runs the dispatch.