Electricity flexibility – getting consumers into the swing of it

Sustainability is best served when consumers are well informed and actively involved as they are the ultimate judges of what works best in terms of affordability and usefulness. Thankfully, the UK energy transition will involve greater participation by the demand side than previously. The National Electricity System Operator (NESO) is responsible for ensuring electricity supply meets demand each day and one of its transition scenarios, Electric Engagement, aims to engage residential and corporate customers in the energy transition using smart technologies.

Until recently, the energy system was a tripartite split of oil for transport, gas for heating, and electricity (originally mostly coal-fired) for lighting and gadgets. Its evolution was largely driven by the state and supply side, within the constraints of geopolitics and available technologies. Predictably perhaps, this non-integrated system was energy inefficient. On the plus side, it worked (usually). However, its true costs were unclear – the environmental costs were simply kicked down the road, leaving us with difficulties today and potentially even greater problems for future generations.

The emerging new energy system, popularly referred to as ´the electrification of everything´ is the antithesis of the legacy system. It is a means of decarbonising large parts of the economy by replacing fossil fuels with electricity generated from renewable power sources, transitioning the grid to utilise renewable energy and enabling increased use of electricity to power transport and heat buildings. Advances in battery technology are enabling increased use of electric motors in road, rail and maritime transport. While heat pumps are improving energy efficiency in heating buildings.

The emerging new energy system, popularly referred to as ´the electrification of everything´ is the antithesis of the legacy system. It is a means of decarbonising large parts of the economy by replacing fossil fuels with electricity generated from renewable power sources, transitioning the grid to utilise renewable energy and enabling increased use of electricity to power transport and heat buildings.

However, this new energy system brings at least one headache - storage. Electricity is notoriously difficult to store compared to fossil fuels which embed low-cost and easily accessed energy storage options including coal stacks and oil & gas reservoirs. Therefore, renewable energy generation, which is variable, needs to match demand, which is also variable. The challenging job of managing these mismatches, by coordinating generation and storage assets, falls to NESO.

The availability of half-hourly prices throughout the day can disincentivise consumption at peak times as electricity users can see when prices are high and therefore use electricity at other times. However, domestic consumption accounts for nearly 30% of electricity demand and it is clear from the peaks in power prices in early morning and in the evening that household consumers are driving some of the intra-day mismatches in prices. Consumers are stuck in behavioural patterns that have been ingrained over decades.

Therefore, balancing supply and demand is one of the biggest challenges for energy companies (today largely managed by gas flexibility) and will be a growing challenge for the electrified energy system of the future. A robust system will also need greater electricity storage infrastructure to ensure system reliability (including pumped-storage hydro and other long duration technologies).

As well as driving decarbonisation, increasing the flexibility of demand has several other long-term system benefits. For example, smoothing peaks in demand enables more efficient use of electricity distribution networks, helping to control the undoubted need for improvements to infrastructure to meet the need for greater electricity demand.  Moreover, making better use of renewable energy at times of strong supply can reduce the problem of having to disconnect excess production to manage supply for which producers are reimbursed.

Overall, changing users’ consumption patterns is essential to increase the efficiency and reduce costs of the entire energy system. There have already been successful trials by the NESO using its demand flexibility service, where consumers were paid to switch off electrical items at times of high demand. But there is still a way to go.

Given the evidence that the public sees the transition to net zero as being positive for the economy of the UK in the long term, it is time for us all to embrace the energy transition, and to engage with it. Learning to love it will underwrite its sustainability.

Callum Macpherson