Demand flexibility is ‘chronically undervalued’ in ESO plans

Demand flexibility is “being chronically undervalued”, the Association for Decentralised Energy (ADE) has claimed.

The trade body was commenting in response to plans by National Grid Electricity System Operator (ESO) for a £58 billion investment into upgrading the transmission network to accommodate the vast quantity of new generation that will be needed to deliver a net zero power sector by 2035.

While the ADE acknowledges the need for ambitious investment, it cautions that a “coordinated approach” is needed. It further warns about a lack of emphasis on demand flexibility.

Oz Russell, industrial energy policy officer at the ADE, said: “Consistent underinvestment in UK transmission infrastructure, electricity demand doubling by 2050, and the vast length of the queue to connect to the grid, all make clear the necessity to build new infrastructure.

“At the same time, demand flexibility is still being chronically undervalued. Energy flexibility will enable less disruption, lower costs and fewer pylons across the UK, helping to manage network constraints and make the most of the intermittent renewables on the system, both now and in the future.”

After Russia’s invasion of Ukraine, concerns over security of supply led to the creation of the Demand Flexibility Service (DFS) which rewards households for reducing their consumption during periods of high demand.

In January, it was revealed that more than 2.2 million households and businesses had signed up to participate in this winter’s scheme.

For comparison, more than 1.6 million signed up to the inaugural service last winter.

Yet speaking during a Utility Week event last year, one National Grid senior figure said the DFS is “a means to an end” from which the ESO will eventually “step back” as new routes emerge for consumers to provide flexibility to the power grid.

The ESO’s recent spending plans include building a new ‘electrical spine’ through Britain which it says will increase accessibility to low-cost, clean energy and also improve the robustness of the network.

However, director of policy at consultancy Stonehaven Adam Bell warned that the proposals have fired the “starting pistol” on what will become a “very nasty debate” over infrastructure.

He said the plans for upgrading the transmission network will “upset a lot of people” living alongside proposed new power lines and present an “immense political challenge” going forward.

In January 2024 Utility Week established its Flexibility Forum, in association with our strategic partner CGI, to help break down barriers to energy flexibility growth and provide an independent setting for sense-checking the direction of travel in flexibility market governance and regulation. The Flexibility Forum community includes stakeholders from across the energy value chain. Outputs from the forum to date include a report on the status of demand side flexibility markets in GB and a review of discussion at the Forum’s first meeting.