An energy aggregator is a company that combines spare power from batteries and other controllable electrical equipment across different sites. It uses that combined power to cut clients’ electricity costs or earn income in wholesale electricity markets and flexibility services. This type of company is also called a flexibility aggregator.
In this article, find out what energy aggregators are, how energy aggregation works and what to check before you let a provider use your commercial battery.
What is an energy aggregator?
An energy aggregator is a company that helps businesses use their batteries to earn money in the electricity markets.
Your battery stays where it is — at your site. You tell the aggregator when it may use your battery for trading and how much electricity it must leave stored for your site. For example, you might require it to keep at least 20% of the battery full.
The aggregator manages your battery and other companies’ batteries as one larger group so it can trade on your behalf.
When there is a trade available, the aggregator uses its software to send out charging or discharging instructions to the batteries in its network, including yours. The instruction goes to your battery’s inverter, which controls the electricity flowing into and out of the battery.
If the battery discharges, your site may buy less electricity from the grid or send more electricity back to it. If it charges, your site may take more electricity from the grid. The meters record these amounts.
The aggregator compares the meter readings with the trade it arranged to check how much electricity each battery charged or discharged. It then uses the payment terms agreed with each business to calculate how much they receive.
Not every battery can take part. Before accepting yours, the aggregator must check that it can connect to the battery controls and receive the meter readings it needs. It must also check that your inverter, electricity contract and grid connection allow the battery to trade.
What is the difference between an energy aggregator, broker, supplier and virtual power plant?
An energy broker, electricity supplier and energy aggregator are all companies, but they do different jobs.
A broker helps you arrange your electricity contract. Your supplier sells you electricity and sends your bills.
An energy aggregator uses your battery within the limits you set to take part in electricity markets and services on your behalf.
A virtual power plant, or VPP, isn’t a company. It is the name given to the group of batteries and other equipment connected to the same control system.
Put simply, the aggregator is the company that arranges the trades and sends the instructions, while the VPP is the group of batteries and other equipment that receives those instructions.
| Energy broker | Electricity supplier | Energy aggregator | Virtual power plant | |
|---|---|---|---|---|
| What is it? | A company or adviser that helps you arrange an electricity contract | The company you buy electricity from | A company that groups batteries and other equipment from different sites | A group of batteries and other equipment connected to the same control system |
| What is its job? | Compares tariffs and helps negotiate your contract | Supplies your electricity and sends your bills | Enters suitable markets and services for you and manages the agreed battery charging or discharging | The provider uses the VPP to manage equipment at different sites as one group |
| What does it work with? | Electricity prices, standing charges and contract terms | Your electricity use, meter readings and supply contract | Battery readings, site meter readings, market prices and the limits agreed with each business | Batteries, solar panels, EV chargers and other connected equipment |
| Who can send instructions to your battery? | A broker normally can’t | A supplier can only do this if you have agreed to a separate service that includes battery control | The aggregator’s software can, if you approve it and your equipment is compatible | The company operating the VPP sends the instructions. The VPP itself is only the connected group |
Why use an energy aggregator for a commercial battery?
You don’t need an aggregator to use a commercial battery to cut your electricity bill. Your battery can store electricity when prices are low and use it later when grid power costs more.
If your grid connection agreement gives you the ability to export electricity, you may also be able to sell stored electricity in the GB wholesale market when prices rise. However, permission to export only allows electricity to leave your site. It doesn’t give your business access to the wholesale market or arrange the trades.
To trade without an aggregator, your site would need:
- Enough battery power to make trading worthwhile on its own
- Meter readings for each half-hour showing what your site used or exported
- Battery controls that can follow charge and discharge instructions
- A contract that allows trading
- Enough export capacity if the battery sends power back to the grid
- The trading systems, registration and reporting needed to take part
That is why many businesses choose to use an aggregator when they want their commercial battery to trade.
Instead of managing the market yourself, you allow the aggregator to manage your battery alongside batteries at other sites. The aggregator handles the trading work for you, including meeting the market’s registration rules, arranging trades, sending approved charging and discharging instructions, checking the meter readings, reporting the results and calculating your payment.
| Route | What it means |
|---|---|
| Trading on your own | Your site would need to handle the market rules, data, trading systems and reporting itself |
| Trading through an aggregator | The aggregator handles the trading work and includes your battery in a larger group of sites |
How does energy aggregation work in practice?
Once you choose an aggregator, it follows six steps to prepare your battery for trading, arrange a trade and calculate your payment:
1. Agree how the aggregator may use your battery
You decide when the aggregator may use your battery and how much electricity it must leave stored for your site.
You can also limit how quickly or how often the battery charges and discharges. Your agreement should name who at your business can stop the aggregator from using the battery.
2. Connect and test the equipment
The aggregator connects its software to your battery controller and meters. It checks that the software can receive readings from them and send instructions to the battery controller.
The battery controller sends readings showing how full the battery is and how much electricity flows into or out of it. Your site meter sends readings showing how much electricity your site takes from or sends to the grid.
3. Work out how the battery can be used
The software uses these readings to work out how much electricity the battery can store or supply without using the amount you have kept for your site.
The aggregator may also use forecasts showing how much electricity your site is likely to need, how much solar electricity the panels may produce and what electricity may cost.
4. Arrange the trade
The aggregator arranges to buy or sell a set amount of electricity at a set time.
Its software sends an instruction to your battery controller stating how much electricity to store or supply. The controller passes this instruction to the inverter.
5. Carry out and record the instruction
The inverter controls the flow of electricity into or out of the battery.
The battery controller records how much electricity flowed in or out. Your site meter records how much electricity the site took from or sent to the grid during the trade.
6. Check what happened and calculate your payment
The aggregator checks the readings to see how much electricity your battery stored or supplied for the trade.
Some trades use a baseline. This is an estimate, worked out under the market’s rules, of how much electricity your site would have taken from or sent to the grid without the trade. The aggregator compares this estimate with what your site meter recorded. It uses the result and the payment rules in your contract to calculate how much you receive.
How can a commercial battery cut my costs or earn income?
A commercial battery can lower your electricity bill, earn wholesale trading income or earn payments from flexibility services. These are three different sources of savings or income:
- Lower electricity bills: The battery stores electricity when it costs less and supplies your site when electricity costs more. This means you don’t have to buy as much expensive power from the grid. You don’t need an aggregator to do this.
- Wholesale trading income: The aggregator arranges trades using your battery within the limits you have set. Its software sends charging or discharging instructions, and your agreement sets out how much of the trading income you receive.
- Flexibility payments: An electricity network or system operator may pay the aggregator to arrange a temporary change in how much electricity its group of sites takes from or sends to the grid. Your meter records what your site did. The aggregator uses the reading and your agreement to calculate how much you receive.
Your battery can cut bills and earn income at different times, but it can’t carry out two opposite actions at once. For example, if it is discharging to stop your site buying expensive electricity, it can’t also charge for a wholesale trade during the same period. Your agreement should state which use takes priority.
What should you check before choosing an energy aggregator?
Don’t choose an aggregator from its headline revenue share alone. A larger percentage may still leave you with less money if the fees are higher or the battery earns less.
Before you sign, check that the offer answers these questions:
| What to check | What the offer should tell you |
|---|---|
| The contract | How long it runs, whether it stops you using another aggregator, how you can leave and whether you need to switch electricity supplier |
| Your payment | How the trading income is shared, which fees come out first, when you get paid and how you can question a payment you think is wrong |
| Control of your battery | When the aggregator can charge or discharge it, how much electricity must remain for your site and who can stop an instruction |
| Battery use and failed trades | What stops the aggregator using the battery more often than its warranty allows, what happens if the battery can’t complete an agreed trade and who pays any resulting cost |
| Your data and reports | Who owns and can access your site data, what each report shows and how often you receive one |
The offer should also state which site needs and operating limits the aggregator must follow.
Ask the aggregator to put every answer in the contract before you sign. If something isn’t written down, don’t assume it forms part of the deal.
How GridVolt connects your battery to the market
GridTrade is GridVolt’s market product for suitable commercial battery sites in Great Britain. It can be added to a compatible battery already at your site, and you can keep your electricity supplier.
GridVolt’s Energy Manager can also reduce your site’s energy costs. Its software can send charging and discharging instructions to a compatible battery, so the battery charges when electricity is cheaper and supplies your site when grid power costs more.
Tell us about your battery, tariff and site load. We’ll check whether the equipment is compatible and whether Energy Manager, GridTrade or both may suit your site.
Fill in the form on the right or get in touch via our contact page.
Frequently asked questions
Which markets and services can an energy aggregator use?
Energy aggregators in Great Britain can use five main routes: the wholesale market, the Balancing Mechanism, frequency response services, the Capacity Market and local flexibility tenders. Each route pays for a different service, and most aggregators work in one or two of them rather than all five.
- Wholesale market: Traders buy and sell electricity here before it is used, mostly a day ahead or on the day itself. A business can earn income when the aggregator sells stored electricity at a price that makes the trade worthwhile.
- Balancing Mechanism: NESO uses this market to match supply and demand close to delivery. A business can earn income when NESO accepts the aggregator’s offer to change how much electricity its battery supplies or stores.
- Frequency response: The grid must stay close to 50 hertz. These services pay providers to make battery power available so they can respond to small changes in frequency within seconds.
- Capacity Market: This scheme pays businesses for promising that their sites will be available when the system is under stress, such as on a cold, still winter evening.
- Local flexibility tenders: Distribution network operators, the companies that run the local wires, pay businesses to change how much electricity their sites take from or send to the grid at set times and in set places.
Each route has its own contracts, tests and payment rules. This is another reason most commercial battery owners use an aggregator rather than entering the markets themselves.
GridTrade uses the wholesale market for compatible commercial batteries in Great Britain.
Who regulates energy aggregators in Great Britain
Ofgem regulates electricity markets in Great Britain, and Elexon runs the settlement rules under the Balancing and Settlement Code. Ofgem approved P415 in October 2023. This gave independent aggregators a route into wholesale trading using equipment at customer sites.
An independent aggregator is one that is not also your electricity supplier. To trade your battery's flexibility, it registers with Elexon under a defined market role. In the Balancing Mechanism, the market the National Energy System Operator, or NESO, uses to match supply and demand close to real time, that role is called a Virtual Lead Party, or VLP.
P415 extended that access into the wholesale market. The practical result for a battery owner is choice. Your trading route no longer has to run through your supplier, so you can compare aggregator offers on their own terms.
Ofgem’s guidance on aggregator arrangements covers market access, how results are measured, what aggregators pay towards system costs and who carries the risk when an agreed trade is not delivered. Your contract should state who pays any resulting cost.
An example of how an energy aggregator works
Picture ten commercial sites, each with a 250 kWh battery. No single site has enough spare stored electricity to trade on its own. An aggregator connects all ten through software and manages them as one 2.5 MWh group. When wholesale prices rise, its software sends discharge instructions within the limits set by each business. The aggregator then shares the income under the terms of each contract.
The energy aggregator business model
Most aggregators earn through a revenue share. The aggregator uses the part of your battery you make available to arrange trades, keeps an agreed percentage of the income and pays the rest to you. Some also charge fixed fees, software charges or other deductions before the split. Check these terms before you sign.
Energy aggregator vs utility aggregator
In the UK, “utility aggregator” usually describes a broker network. It helps brokers and businesses get better contract prices for gas, electricity, water or telecoms. A flexibility aggregator helps a business earn money from what its battery or other controllable equipment can do.
What equipment can an energy aggregator work with?
An energy aggregator can work with batteries, EV chargers, heat pumps, refrigeration and other equipment that can change when it uses, stores or supplies electricity. This equipment is sometimes called distributed energy resources, or DERs.
The provider must be able to receive the readings it needs and send approved instructions through compatible controls. It should explain exactly which equipment it can use before you sign.
Can I use an energy aggregator without changing electricity supplier?
Yes, some energy aggregators in Great Britain can trade a suitable battery without becoming your electricity supplier. The provider must still check your supply contract, meter, battery controls and grid connection before accepting the site.