Expensive electricity is the single biggest threat to Britain’s net-zero transition, according to the Climate Change Committee (CCC). As prices climb, they discourage electrification of heating in homes, businesses and the public sector – a core pillar of the UK’s decarbonisation strategy – and put the UK at risk of delivering only 38 per cent of the emissions reductions it is legally required to by 2030.
To achieve carbon emissions reduction targets, the UK energy system requires a profound transformation, with a more innovative approach to transform energy infrastructure. In addition to traditional emissions reduction strategies, this new approach will require a complementary focus on making the energy transition easy and affordable for everyone.
Making energy systems smarter
The government is accelerating clean energy projects and grid connections, but its recently introduced “first come, first served” approach has drawn criticism for being inefficient and outdated.
While today’s policymakers are focused on ramping up renewable energy production and adoption, they’re missing a crucial piece of the puzzle: making our energy systems more intelligent, efficient and flexible when managing user consumption.
Easing the load with Demand Response
Demand response is a valuable and increasingly accessible solution for enhancing grid flexibility throughout the year. Especially during peak periods when demand and prices are highest, it helps to balance the grid, lower system stress, and reduce energy bills for consumers. It does this by shifting or reducing energy usage in real time.
In fact, the government too has started to recognise the value of demand response technology. The National Energy System Operator (NESO) recently revealed that nearly two million households and businesses have registered for demand flexibility services last winter.
Demand response offers several advantages. It easily integrates with electric appliances such as heat pumps and solar panels, helping manage these systems in real time to improve efficiency, cut costs and lower emissions. It can also address challenges with intermittency of renewable energy. By moving energy use away from expensive, high-demand periods and times of low renewable generation, demand response can help cut peak demand and ease grid stress.
It automatically adjusts electricity flow during peak times to reduce consumption, minimise waste, lower costs and significantly cut emissions, all while maintaining overall comfort and supporting grid stability. Implementing these solutions with a national will not only benefit end users but will ultimately be critical to realising the UK’s broader energy transition commitments.
Optimising energy cost and consumption
Supporting the energy transition shouldn’t require bearing additional costs. Rolling out demand response technology, which can be installed in residential and commercial buildings at no cost, not only helps direct users modulate energy consumption during critical hours, but it can also help reduce electricity prices for all energy users and decarbonise “peak load” periods for grids.
The potential impact of this is significant, and a study from Compass Lexecon shows that a 10GW DR capacity, as projected for France in 2030, allows to decrease the price by circa 40€/MWh for the highest peak price.
For energy-intensive operations like university campuses, hotels, and office buildings, even small shifts in energy use can significantly boost energy profitability. Embracing flexibility within existing systems offers a smart, cost-effective way to enhance performance without placing extra strain on the power grid.
Scaling energy flexibility
Britain’s energy grid is by necessity pushing toward a new era of resilience, with flexibility at the core of driving this forward. Improved grid flexibility enables real-time balancing, stabilises wholesale markets, reduces price volatility, and lessens the need for expensive backup generation. Demand response technology is emerging as a crucial element in this new energy landscape.
Until recently, large-scale demand-side response was seen as unfeasible. Today, smart automation and AI make it possible to coordinate millions of decentralised devices, from heaters to electric vehicles, without user intervention. These technologies deliver immediate savings for consumers and reduce strain on the system. Expanding access and accelerating adoption of these innovations are essential for a more resilient, equitable and sustainable energy future. The technology is ready. What’s needed now is implementation at scale to reduce energy-related carbon emissions to meet net zero goals.
Dr. Randall Bowen, Managing Director UK, Voltalis