IN Brief:
- Ofgem expects distribution network operators without digitalisation reopener applications to fund FMAR work from existing RIIO-ED2 allowances.
- Network operators should identify uncertainty surrounding FMAR and Market Facilitator activities in their RIIO-ED3 business plans.
- Elexon is responsible for delivering the common registration infrastructure, while network operators retain obligations relating to their own implementation activities.
Ofgem has clarified how electricity distribution network operators should approach funding activities associated with Flexibility Market Asset Registration and the Market Facilitator during the current and next distribution price control periods.
The guidance, dated 15 October 2026, addresses the funding arrangements relevant to RIIO-ED2, which runs from 2023 to 2028, and planning for RIIO-ED3, covering 2028 to 2033. It is an explanation of funding expectations within those arrangements, not a newly announced universal requirement for every electricity user or flexible asset to register.
Ofgem expects distribution network operators that have not submitted a Digitalisation Re-opener application to use existing RIIO-ED2 allowances for the relevant FMAR activities. The regulator also expects operators to identify uncertainties affecting FMAR and Market Facilitator delivery within their RIIO-ED3 business plans.
Where appropriate, operators may need to consider the relevant reopener application process. That mechanism allows specified expenditure to be assessed under the price control, but an application is not itself an award of funding or an automatic approval of additional allowances.
Flexibility Market Asset Registration, known as FMAR, concerns the information infrastructure needed to support the registration of electrical resources participating in flexibility markets. Examples include storage assets, electric vehicle charging equipment, flexible demand and other controllable resources.
Flexibility refers to the ability of an asset to change the timing or level of its electricity consumption or generation in response to a defined requirement. Electricity distribution networks can use flexibility services to manage local operating constraints, while other markets address needs across the wider electricity system.
The ability to participate depends on the characteristics and location of an asset and on the requirements of the service being offered. Registering an asset does not itself demonstrate that the asset can deliver any particular service, guarantee a contract or establish an entitlement to payment.
Different electricity flexibility markets have developed registration and information processes over time. A common registration approach seeks to reduce duplication and improve the consistency of information exchanged by those operating in multiple relevant markets.
An asset record may need to identify its network location, type and technical capabilities. That information has practical consequences because services depend on where an asset is connected and the electrical effect of changing its power flows.
A battery can have both import and export capability, with different power and energy ratings. An electric vehicle charging installation principally changes consumption, and its available flexibility can depend on whether a vehicle is connected and the energy required by its user.
Common registration infrastructure needs to distinguish these different characteristics. It cannot assume that all assets operate in the same way or that their nominal technical ratings are available to a flexibility market at every moment.
Ofgem previously determined that Elexon, in its Market Facilitator role, should take responsibility for developing, deploying and operating the common registration infrastructure. That central delivery role is separate from the tasks network operators may have to perform within their own systems and processes.
Network operators remain responsible for their relevant implementation activities, including planning work needed to interface with the common solution. The precise requirements depend on the agreed technical design and the obligations that apply to each participant.
The registration programme also raises questions about data quality and maintenance. Assets can be modified, replaced or decommissioned, and their records need to remain accurate if registration data is to be useful for assessing participation in a particular service.
Incorrect information about network location or technical capability could affect whether an asset is suitable for a local flexibility requirement. Registration arrangements therefore need appropriate processes for checking and updating information rather than treating data submission as a one-off task.
Funding for this work is being considered against established regulatory arrangements. RIIO-ED2 defines the current period under which distribution network operators receive allowances and are held accountable for specified activities and outputs.
The Digitalisation Re-opener is one route by which certain expenditure needs may be considered within that regulatory framework. Ofgem’s October guidance states its expectations for companies that have not used that route and explains how ongoing uncertainty should be reflected in plans for the next period.
RIIO-ED3 business planning introduces another challenge because final technical designs and programme dates may develop while companies prepare expenditure forecasts. Recognising uncertainty explicitly can help distinguish confirmed commitments from costs that depend on later decisions.
The guidance does not decide the final scope of every network operator’s implementation work, replace Elexon’s technical design process or confirm that the common registration platform is already fully operating.
FMAR is also only one part of flexibility market participation. Procurement, service qualification, dispatch, verification and settlement remain distinct activities requiring their own rules and operating arrangements.
The 15 October publication consequently addresses a defined regulatory and funding issue: how distribution network operators should support relevant registration and Market Facilitator activities across RIIO-ED2 and the transition to RIIO-ED3. Delivery and future funding decisions remain subject to the applicable processes.
