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An intro to the jargon of energy flexibility.
This blog explains some of the jargon behind energy flexibility, what DERs (Distributed Energy Resources) and demand response (DR) actually are, and how they can contribute to the UK's net zero goals.
At the heart of climate change prevention is electrification. This is the core of the UK's net zero strategy, there is some great progress being made but plenty of work to do to meet the legally binding requirement to reach net zero emissions by 2050, and the UK’s commitment under the Paris agreement to to cut emissions by 68% by 2030.
The UK energy supply is changing: with the use of renewables growing. Renewable energy is clean, but its supply fluctuates. With the adoption of EVs, air conditioning and the electrification of heating, overall electricity demand is outpacing the transformation of the grid. By 2050, it’s predicted that the world will need four times as much electricity generation as it has today. In order to handle this increased demand, and more intermittent supply of electricity, we will need to invest in physical grid infrastructure. However, there is a second lever that will be equally important. We can look to the customer (the demand-side) to match energy use (consumption patterns) with peaks and troughs of grid electricity.
This matching of consumption to demand, is what we mean by energy flexibility, and it’s critical to the electrification of the UK’s energy system. Energy flexibility aims to incentivise consumers and businesses to shift their electricity usage away from peak hours and pay them to do it. By encouraging more flexible consumption patterns, these initiatives can help balance supply and demand more efficiently while reducing costs for both consumers (demand) and grid (supply).
The foundations of electricity flexibility are fluctuations in electricity prices. Price can be influenced from two directions:
During periods of high demand, electricity prices tend to be higher. Conversely, during periods of low demand, such as late nights or weekends when overall consumption is lower, prices may be lower. Similarly, when there is limited capacity on the grid, prices can spike as suppliers compete for available resources. If there is excess supply from renewable sources during certain hours , prices may decrease due to surplus generation.
Critical to the wide-spread adoption of energy flexibility are DERs (distributed energy resources) and DR (demand response).
DERs are local small-scale connected devices that either generate, consume or store electricity. They include solar panels, batteries, HVACs, EV chargers etc. These resources provide localised energy flexibility which can reduce strain on centralised power plants.
DR, empowers energy users (demand side) to adjust their electricity usage in response to grid signals. By voluntarily reducing or shifting energy consumption during times of high demand or low renewable generation, businesses can support grid stability and earn financial incentives.
Energy flexibility plays a crucial role in the UK's electricity market, especially as the grid becomes more and more driven by renewable energy. Energy flexibility is a rapidly growing space that enables this electrification by balancing electricity demand and supply.