At home in Sunderland, north-east England, Walt Scales and wife Alexis try to finish their washing and cooking by 5pm. Ovo Energy, their electricity supplier, enters them into a prize draw for cutting usage from the mains supply between 5pm and 7pm on weekdays.
For the retired bus driver, who switches to a small household battery for essentials in the evening, the benefits are more than financial. “It means we can relax totally from 5pm, so it’s kind of enriched [our lives]. There’s more time for each other,” he said.
The couple are responding to a push by energy companies and officials to encourage households and businesses to change their habits and adjust electricity use according to supply, as part of the government’s goal of decarbonising the electricity system by 2030.
This could mean avoiding peak times, such as the teatime rush, or using more power at times of high wind. Along with zonal electricity pricing, it is one way to lessen the amount of new grid capacity that needs to be built and potentially keep costs down.
New tariffs, trials and schemes are under way around the country, and the National Energy System Operator wants to see up to five times the current level of flexible power demand in order to meet the national 2030 clean power target.
But NESO concedes there are a “broad range of views” about the feasibility of that goal, which will require technological and commercial developments — and big changes for consumers.
“I think it [demand flexibility] has to happen,” said Laura Sandys, chair of the Green Alliance and board member at EV charging company Ohme Global. “[But] it’s probably the most complex part of the jigsaw. This is all about customers.”
Consumers have been encouraged to use electricity outside of peak hours for decades, through “Economy 7” tariffs offering cheaper power at night, or lower network charges for factories outside peak times.
But the idea is taking on more importance given the effort to shift away from fossil fuels, which involves moving from petrol cars and gas-fired boilers to electric cars and heat pumps powered by renewable electricity.
Electricity supply and demand have to be matched second by second to maintain system stability. But unlike coal and gas-fired power plants, wind and solar farms depend on the weather and cannot be so easily controlled in line with consumer needs. Demand needs to adjust instead.
Excess power can be stored in the form of batteries or hydropower plants, ready to be discharged when needed. But officials believe households and businesses adjusting their behaviour could also help, by, for example, charging electric cars when it is sunny and windy, or turning down industrial freezers when it is not.
Powering Britain
This is the second part in a series on the future of Britain’s electricity grid
Spreading demand across the day could also cut the investment required in electricity networks, since they would not have to cope with such heavy peak loads. British wind farms often have to switch off if they are producing more than consumers can use at that time, owing to a lack of grid capacity.
“Flexibility services are crucial for transitioning to a net zero network,” said Northern Powergrid, which serves swaths of northern England.
The Berkshire Hathaway-owned company has been offering up to £900 per megawatt hour — more than 10 times the typical rate for electricity bought a day ahead — for business and household consumers to shift their consumption when needed.
UK Power Networks, which serves London and south-east England, said it had 100,000 “assets” registered on its network whose demand can be increased or reduced as needed.
The network companies’ offerings come on top of NESO’s national voluntary “demand-flexibility service”, under which households are paid to cut electricity use if a shortage looms.
Introduced at the height of the energy crisis in winter 2022, the scheme was initially popular, but critics fear the recent removal of a guaranteed payment level will dent enthusiasm.
“Customers [need] to see and feel good value from doing this,” said Kieron Stopforth, head of flexibility at Octopus Energy, the UK’s largest household energy supplier. “A bit of funding early on can help seed growth.”
Octopus and other companies offer or are developing time-of-use tariffs where prices incentivise consumers to respond to constant fluctuations in supply, boosted by market reforms and the rollout of smart meters, which are in about 60 per cent of homes.
Combined with plans for regional electricity pricing, the tariffs could lead to consumers in Scotland charging their cars very cheaply when it is windy in the North Sea.
The time-of-use model has many enthusiastic proponents. “Essentially, my fuel for the car is two pence per mile,” said Tesla owner Iain Turner, a customer of Octopus’s Intelligent Go tariff.
He also sets his washing machine, tumble dryer and, in the summer, swimming pool pump to come on at night. “About 50-60 per cent of my electricity is now at a cheap rate,” added the Colchester resident.
Yet there is also the risk of consumers missing out on benefits if they are less engaged, or get caught out by surge pricing, the flip side of some tariffs offering ultra-cheap electricity at certain times.
“Overall we see [flexibility] as an opportunity for consumers,” said Andy Manning, head of energy systems transformation at consumer watchdog Citizens Advice. “[But] it needs to be underpinned by effective protections [for them].”
Industrial users’ appetite for shifting their electricity use varies. Some factories are already running power-hungry machinery during brief spells of negative electricity prices triggered by surges in supply. But dialling up and down is not always suitable because it can damage equipment.
Getting users on board is not the only challenge. A study in November of 900 homes, 408 of which had electric vehicles or an electric vehicle charger, showed their electricity demand peaked in the middle of the night when cheap overnight tariffs kicked in.
“There’s a certain critical mass where you’ve created a peak somewhere else through herding behaviour,” said Claire Rowland, at Energy Systems Catapult, a government-backed research and technology organisation, that carried out the study.
Trials are also under way to see whether households can be flexible about when they run heat pumps. That could involve switching them on a few hours before they come home and then off during peak times, relying on the home to hold warmth for a few hours.
In a survey at the end of a trial run by National Grid and others last year, known as Equinox, about half of the participants reported discomfort “sometimes” for themselves or other household residents from using power more flexibly. But almost all — 91 per cent — said this was “mild”.
The University of Wales Trinity St David, Lampeter, has installed technology that automatically turns down electric heating in students’ rooms when the local network provider is looking for electricity savings.
Dan Priddy, head of sustainability at the university, said it might be rolled out further, but noted “we wouldn’t want it to come on midway during a washing [machine] cycle”.
Voltalis, the French company behind the technology, has said it plans to invest £1bn in Britain by 2030, following market reforms last year that allow aggregators to be paid for saving, rather than generating, electricity.
Randall Bowen, managing director in the UK for Voltalis, said: “The opportunity is greater in the UK than we’ve seen in other countries.”
Despite many uncertainties Scales, whose prize draw entries could win him a year’s worth of free energy, is happy to be at the forefront of a changing system.
“I never stop talking about it,” he said. “It’s important that people pay attention to national consideration.”
Data visualisation by Janina Conboye
