- Modelling the GB flexibility market - Part 1 - The value of flexibility
This study set out to assess the value and whole-system impact of demand-side flexibility in a net zero carbon energy scenario for the UK.
Our analysis has produced the following key results, which are discussed in more detail in the body of the report.
- Hitting net zero requires significant investment in low-carbon generation, demand-side technologies (electric vehicles (EV), heat pumps, etc.) and electricity network capacity.
- The modelling showed that a ‘passive’ approach to demand management represents the most expensive decarbonisation configuration in 2050.
- Compared to a passive approach, flexibility can reduce the whole-system cost by £4.55bn per annum by 2050, through a combination of operational improvements and reduced capacity investments.
- Compared to the passive approach, flexibility is not only fundamental for achieving a viable capacity build-out to 2050 but delivers benefits across the power system. It will be easier to monetise operational savings (such as fuel savings), but to avoid high-value network expansion investment, flexibility will need to mature and represent a proven asset.
- Decarbonising the power grid with variable renewable energy sources (VRES) expands the market for flexible services.
During the course of this study, we noted that the capabilities of demand-side response (DSR), grid-scale storage and V2G technologies overlap, which will lead to competition between them. An accompanying report, “The Value of Centralised and Distributed Storage”, examines some of the path dependencies and risk/reward trade-offs this may create.