How energy flexibility is reducing business energy costs and facilitating Net Zero

The UK energy system is undergoing a seismic shift. As we move away from fossil fuels and towards a net-zero future, the challenges of maintaining grid stability, sustainability, and – crucially – affordability have never been more complex. At the heart of this transition lies a critical but at times underutilised solution: flexibility.

 

In its Clean Power 2030 report, the National Energy System Operator (NESO) has quantified this need: a five-fold increase in demand-side flexibility. The Department for Energy Security and Net Zero (DESNZ) has now set up “Mission Control”, led by former Climate Change Committee Chief Executive Chris Stark, to deliver clean power by 2030, including the flexibility that makes all the other elements of decarbonisation work.

 

Energy flexibility – the ability to adjust electricity consumption and generation in response to grid conditions – will form a crucial part of unlocking a cleaner, more resilient energy system. By enabling businesses, public sector organisations and individual households to modify their energy usage in real time – and be paid for doing so – we can optimise supply and demand, reduce reliance on carbon-intensive generation and enhance grid stability, while reducing energy costs for businesses and consumers.

 

The growing need for flexibility

 

The rapid deployment of renewable energy sources, such as wind and solar, is a cornerstone of the UK’s power generation decarbonisation strategy. However, these resources are inherently variable. The wind doesn’t always blow, and the sun doesn’t always shine. Without effective balancing solutions, fluctuations in supply can lead to inefficiencies, higher costs and even system stress.

 

Traditionally, coal-fuelled power stations have provided grid stability, ramping generation up or down as needed. But as these plants have been phased out – with the UK’s last coal power station, Ratcliffe-on-Soar, having closed in September 2024 – we must turn to smarter, more sustainable alternatives.

 

Battery energy storage systems (BESS) are already playing an increasingly important role here. Growth in BESS build-out features prominently in the UK’s Clean Power 2030 action plan, alongside pumped hydro and other dispatchable generators. Despite having to overcome multiple barriers in recent years, demand-side flexibility is also now set to establish itself as a key part of the solution. Furthermore, most of the other central elements of national decarbonisation depend on flexibility to make them tractable.

 

For example, rough estimates suggest that the theoretical peak demand of electric vehicle charging in Britain – that is, if every household had an electric vehicle and everyone decided to charge them all at the same time – is around 126GW. That’s more than twice the record “peak of peaks” of winter 2010, which reached a record high of 61GW. This is a purely theoretical number: it won’t occur in practice, and it’s possible to do similar eye-popping calculations on electrical devices that are already in every home. But looking at it that way does illustrate the size of the challenge – and the size of the opportunity. As a flexible resource, EVs can shift demand from when networks are constrained to when power is cheapest and greenest.

 

How demand-side flexibility works

 

Demand-side flexibility allows energy users and distributed generators to adjust their consumption and generation in response to signals from the grid, helping to alleviate pressure and maximise the use of renewables. This can take many forms, from industrial sites shifting production schedules to large-scale battery storage charging, or discharging at optimal times.

 

Flexitricity has pioneered demand-side flexibility services in Britain and has continued to lead the industry for nearly two decades. We aggregate diverse flexible energy loads across the UK, creating a virtual power plant of over 1GW (larger than the UK’s latest large gas-fired power station!) that responds in real time to grid needs, supporting the transition to a low-carbon energy system.

 

The benefits for businesses

 

Participating in demand-side flexibility is not just about sustainability. It also makes financial sense. Businesses with flexible energy assets can access new revenue opportunities by providing services to the grid and trading ad hoc flexibility in the energy markets. Whether it’s adjusting heating and cooling systems, flexing EV fleets, optimising battery storage or shifting energy-intensive processes, organisations can turn energy flexibility into a competitive advantage.

 

Moreover, with wholesale electricity prices becoming increasingly volatile, flexibility can help mitigate costs. By responding to price signals and shifting consumption away from peak periods, businesses can significantly reduce their energy bills.

 

A policy landscape that supports flexibility

 

With Clean Power 2030, the National Energy System Operator (NESO) has recognised the vital role of flexibility in achieving Net Zero. New market and regulatory changes will soon give a broader range of organisations access to real-time flexibility markets, and Flexitricity will be ready to support them to make the most of their ad hoc flexibility.

 

However, to fully unlock the potential of demand-side flexibility, we need continued policy support, market innovation and increased awareness among businesses and consumers. The integration of smart technologies and AI-driven optimisation will further enhance our ability to predict and respond to grid conditions, making demand-side flexibility an even more powerful tool in the years ahead.

 

The future of energy

 

As the UK accelerates towards Net Zero, flexibility will be the lynchpin that holds the energy transition together. By harnessing the power of demand-side flexibility, we can create a cleaner, more cost-effective and more resilient electricity system – one that benefits businesses, consumers and the environment alike.

 

At Flexitricity, we are committed to leading this transformation. The future of energy is flexible, and now is the time to embrace it.

---

To find out more please visit www.flexitricity.com