Demand-side flexibility: what is it, and why is it important?

Demand-side flexibility refers to the ability of homes, offices, factories to shift and vary their electricity consumption to help balance the grid and keep the lights on. 

Why is this important? Because the generation and use of electricity must be kept in perfect balance for every single second, minute, and hour of every day. This is no easy task! The UK’s grid operator runs an Electricity National Control Centre at an undisclosed location that has teams of people whose job is to predict and assess our collective demand for electricity and make sure that there is sufficient supply coming in to meet it.

With renewable energy growing as a percentage of total electricity generation, the UK is increasingly reliant on more variable sources of generation such as wind power. While wind and solar output can be quite accurately forecasted, the grid operator needs to ensure that other forms of supply (including battery storage, hydropower, imports, nuclear - and yes, unfortunately natural gas) are on hand to ensure that demand is met. Any serious imbalance could cause key parts of the grid infrastructure to trip, potentially leading to blackouts.

Thankfully, Great Britain’s electricity grid is the most reliable in Europe, and one of the most reliable in the world. With UK electricity consumption projected to double by 2050, alongside a sixfold increase in renewable energy generation, managing the grid is becoming more challenging with every year that passes.

This is where demand-side flexibility comes in. Instead of relying entirely on additional supply to meet projected shortfalls - or paying generators to curtail output when there is actually too much -, it helps immensely if demand is more flexible.  This enables the grid operator to have a big additional lever they can pull.

Based on a study by the UK Parliament, we have defined three different forms of flexibility that people and other electricity consumers can provide:

• SHIFT: By shifting demand out of peak and into off-peak hours, we can help flatten the demand curve and help the UK avoid lots of investment in new grid capacity - resulting in big savings and fewer transmission lines spoiling our countryside! 

• FLEX: We also need to flex our demand over the day, and across days, to better match the availability of wind and solar generation. This helps to ensure that we use every electron we generate from renewables, and reduce the need to resort to gas and other forms of peaker capacity - meaning further cost savings for all!

• RESPOND: Finally, consumers can really help the grid operator in shorter time periods by turning down/off (or up/on) certain appliances - often for just a few minutes - to help with real-time grid balancing. This is a service the grid operator pays for, so is another area where demand-side flexibility can save money.

The challenge for all of us is how to become more flexible, but without spending our days and nights turning appliances on and off. Very few of us want to become energy managers!

In our view, the starting point is to get the incentives right. Smart (time-of-use) electricity tariffs provide a strong incentive for people to become more flexible: static smart tariffs support SHIFT actions, but dynamic smart tariffs - where the cost of electricity changes every half hour - support both SHIFT and FLEX actions. 

These tariffs are going to become much more prevalent from 2026 due to an upcoming regulatory change, when the energy suppliers will be exposed to the real cost of each of their customers’ half-hourly consumption.

But there is no need to wait until 2026! Big savings are available today, especially for those who are already on the electrification journey. Our aim is to help people in assessing and signing up to a smart tariff, and then to assist them in becoming more flexible. Doing this helps accelerate the transition to 100% green energy while cutting bills, a win-win for people and the planet.