Flexibility is a relatively new concept, but in its simplest terms, it means moving energy demand outside of peak times, for example between 4–8pm on a winter’s day, to quieter times like late at night or early morning.

Flexibility within the energy market has emerged as a critical enabler of the transition. Within its recent advice to UK government, the National Energy System Operator (NESO) set out the need for a five-times growth in flexible demand by 2030, underpinning the government’s aim that by 2030, 95% of power should come from low-carbon, but largely inflexible, generation. Not only does this flexibility help support the system, but it is also supporting cheaper and more engaging propositions for homes and businesses.

Incentivising customers to change their behaviour spreads energy use throughout the day, allowing us to run equipment more efficiently and to connect more renewables. It engages customers in the net zero transition, and also provides an additional source of income to everyone from electric vehicle (EV) drivers to owners of large-scale generation or battery storage.

At the forefront of this transformation is UK Power Networks’ Distribution System Operator (DSO). UK Power Networks owns and operates more than 100,000 substations, delivering power to 8.5 million homes and businesses in London, the South-East and East of England. Each part of its network needs to be able to serve peak demands, but sizing the network for occasional high usage could soon see costs passed on to customers. The DSO works with customers connected to the network to ensure there is the right capacity in the right place at the right time to enable the energy transition, and critically that this is delivered at lowest cost.

Why does flexibility matter?  
Flexibility allows companies like UK Power Networks DSO to accommodate the increasing customer demands – from EVs, heat pumps and renewables – ahead of needing to expand their infrastructure. Applied alongside targeted infrastructure investment, flexibility is reducing the cost of the energy transition while also enabling customers to connect to the network sooner.

UK Power Networks recently demonstrated the value of this approach, by using flexibility to defer £91mn of infrastructure costs in the last year alone, which otherwise would have been passed on to customers. In securing 1.5 GW of flexibility and expanding the amount of flexibility available to the control room tenfold, the company is showing this is an important and viable tool in the transition.  More than 30,000 UK Power Networks’ domestic customers benefit directly from flexibility payments each time they change the timing of their electricity use in response to network needs. Meanwhile all customers in UK Power Networks’ region benefit from lower bills.

The company has worked hard to widen access to its flexibility programme, offering access to organisations with just 10 kW of flexible capacity, equivalent to just a handful of EV chargers. Six years after launching its first call for flexibility, UK Power Networks DSO now can call on flexibility provision ranging from grid-scale generation and storage, through to industrial and commercial users and thousands of homes. Nearly half of the flexibility it has contracted comes from individual households, aggregated by energy suppliers or independent companies. By partnering with major energy suppliers like British Gas, OVO and Octopus – who collectively serve over half of the UK’s domestic market – UK Power Networks DSO is broadening participation in flexibility initiatives, amplifying their tangible impact on the grid and the environment.

Much of this domestic flexibility comes from EVs, which can be set to charge at off-peak times. But more recent developments by the company’s flexibility markets team have opened up opportunities for a wider range of households.

Where does flexibility come from, beyond EVs?  
One of the most innovative projects in this space is the new demand turn-up service, designed to utilise excess local green electricity that might otherwise be wasted. For example, imagine a windy night in the North Sea when wind farms are generating lots of electricity, but in the middle of the night there’s nobody to consume it. UK Power Networks DSO worked with suppliers to develop a product that sends a signal to increase demand, such as EV chargers, to soak up that excess electricity for free. Octopus Energy called this product ‘Power-ups’, and it’s already become a huge hit with customers.

Power-ups sees flexibility instructions issued the day before, allowing people to participate through smart charging appliances or EVs, but also through behavioural change, such as running appliances like the tumble dryer at a different time. Participation is entirely optional, but it won’t surprise anybody that cheap renewable energy is proving popular with customers.

Flexibility within the energy market has emerged as a critical enabler of the transition. 

The value of flexibility derives not just from its benefits to distribution networks like UK Power Networks. It can also reduce our reliance on expensive and carbon-intensive energy generation and help to balance supply and demand close to real-time. These benefits are rewarded through different market mechanisms that may not always align. For example, the local network in an area may be experiencing high demand, just as a glut of North Sea wind means that wholesale electricity prices are low.

A forward-looking project in this space is Shift 2.0, which focuses on the potential challenge of ‘herding’ – a scenario where large numbers of EVs may charge simultaneously in response to favourable conditions, such as low electricity prices, creating new peaks in demand. While this is not an immediate concern, UK Power Networks anticipates that as more EVs come online in the 2030s, and with greater fluctuations in wholesale electricity prices driven by offshore wind generation, this herding of behaviour could pose a significant issue.

Working with ev.energy and Octopus Energy, UK Power Networks is trialling ways to mitigate this future challenge, exploring solutions like dynamic network pricing, which would offer tailored incentives to encourage EV users to spread out charging times and avoid creating these secondary demand peaks. The project is working with around 1,500 EVs, exploring to what extent their behaviour can be predicted and influenced through a combination of wholesale electricity prices and dynamic network prices. 

While further investigation is required, this pioneering approach has the potential to be used alongside flexibility procurement in the future.

Meanwhile, the use of daily flexibility auctions alongside biannual auctions for multi-year flexibility contracts continues to grow.

This forward-looking approach is supported by significant investments in technology – including development of automated local forecasts and integrated systems which allow providers to automate their participation. These investments are important to ensure that flexibility can deliver benefits at scale and to make it as easy as possible for people to participate.

Looking ahead  
Flexibility is the cornerstone of the UK’s energy future. As the country moves towards net zero, the ability to dynamically manage energy demand and supply will be crucial in ensuring grid stability, reducing costs and accelerating the adoption of renewable energy. As an industry, utilities must challenge norms and engage a diverse range of stakeholders to maximise the benefits of the energy transition. It must continue developing new flexibility solutions, and then trialling them in the real world just as we have done with initiatives like demand turn-up, day-ahead procurement and Shift 2.0. Only then can we prove these services are not just theoretical concepts but practical tools that deliver real-world benefits to everyday energy consumers.

Flexibility can be the linchpin of a cost-effective and sustainable energy system, and companies that push the boundaries and innovate, like UK Power Networks DSO, will be instrumental in achieving a resilient, low-carbon future.

• Further information: ‘Powering up the consumer: UK power networks trial app-controlled off-peak charging with variable success’. Trials carried out by network companies and utilities are aimed at proving it is possible to shift electricity demand by offering incentives to customers.
• Find out more about Octopus Energy’s energy reduction scheme that created some 108 MW of grid flexibility in first test session.