- Flex appeal. How can the ESO Demand Flexibility Service shape the future of our energy supply?
If you’ve been following Project LEO’s progress over the last few years, you will be well acquainted with the concept of energy flexibility. It’s at the heart of what we’re trying to achieve and we believe it’s a powerful way to give communities control of their energy usage, helping reduce strains on the grid supply as well as taking positive steps towards our net-zero future.
You may have heard at the end of last year, as we approached the difficult winter of 22/23, that the National Grid Electricity System Operator (ESO) had teamed up with a number of energy suppliers to offer a Demand Flexibility Service (DFS) and this has now been running for a few months. In this article, we want to give an overview of what the DFS is, why it has been launched, how it works and take a look at its progress so far.
Let’s first start by covering the basics of the concept of energy flexibility. Until recently, we looked at our energy supply as a one-way flow of electricity from the grid to our homes and businesses that can be used throughout the day as required. However, as electricity usage continues to increase, the possible issue of demand overload on the local grids at peak usage times has sparked warnings of potential blackouts. Energy flexibility or demand flexibility is simply a way of managing the use of electricity during these peak times in order to relieve the pressure on the energy supply network.
Why is flexibility needed this winter?
Back in October 2022, ESO published its electricity and gas sector winter outlook reports that forecast likely scenarios for energy supply and demand. These predictions are vital for planning to maintain the UK’s energy security. In 2022, ESO cited “unprecedented turmoil and volatility in energy markets in Europe and beyond” and called for certain interventions to be made to maintain adequate margins for the UK’s energy supply.
One of these interventions was the launch of the Demand Flexibility Service enabling energy users to be incentivised to use less energy at peak demand times.
How does it work?
Following a consultation in the summer, a new scheme, run by energy suppliers, was rolled out which sees suppliers rewarding customers when they use less energy during peak times.
26 energy suppliers signed up to take part and are notified by the National Grid when the service can go live if the UK’s energy supply falls low. To date, the scheme has been tested eight times, with customers being asked to avoid the use of energy-hungry devices such as washing machines, dishwashers and tumble driers during set hours. The households receive monetary rewards for their successful participation in the tests. There will be a total of 12 trial sessions running up to march which will allow ESO to gauge the feasibility of an ongoing energy demand reduction scheme.
National Grid will also ensure that the scheme runs for 12 trial sessions to ensure people are rewarded just for taking part, even if there are no blackouts this winter
Has the Demand Flexibility Service been a success?
Initial reports on the uptake of the ESO scheme have been encouraging. It’s reported that as of December 2022, more than one million households had signed up to participate across the 26 energy providers. And following the first five trial sessions, ESO data reported a 780 megawatt-hour of consumption avoided. They also revealed that the first two tests, at the start of November, had exceeded expectations, with consumers overdelivering by 50% in the first event and 35% in the follow-up.
The scheme had its first roll-out in a live scenario as the cold snap bit the UK on January 23 and 24, with Octopus Energy, British Gas, EDF and E.ON all taking part. The scheme will run with the option of again going live until March 2023. At this time of high demand from the grid, the first live version of the Demand Flexibility Scheme saved 250MWh in energy and paid back over £1 million to consumers taking part.
If homes and businesses are empowered to take more control over their energy use, there is scope for individuals to actively cut their energy consumption.
A longer-term view
With such encouraging results from the tests, we would hope to see a roll-out of the demand-supply service from energy suppliers, delivering benefits not only to households in terms of rewards and to the grid’s energy security, but also in increasing awareness of energy reduction and flexibility among consumers as a step towards achieving our net-zero goals. If homes and businesses are empowered to take more control over their energy use, there is scope for individuals to actively cut their energy consumption.
But the reduction of energy demand at certain times is just a part of the overall picture of energy flexibility. At Project LEO, we have been looking at many aspects of energy generation, storage and use to see how these can all work together to create smart, local energy systems.
For example, the testing of the use of local renewable energy generation from domestic, community or industrial sources is a key aspect of the Project LEO trials and seeing how integrating this into our community energy system to increase flexibility and reduce reliance on the grid is vital to informing future energy supply plans.
The introduction of the concept of flexibility in energy supply and demand by ESO however, can be seen as a major milestone for the UK’s transition to a smarter, more flexible electricity system that will lead to benefits for households, businesses, communities, the grid and the environment and we look forward to seeing the results of the tests and proposals for the next steps.
19th February 2023