Now is the time for all consumers to come to the aid of their grid
Simply sign up to the UK energy myFT Digest -- delivered directly to your inbox.
This winter, millions of British households may be called upon to keep the country’s lights on.
National Grid — the company in charge of Britain’s electricity system — has asked customers with digital “smart” meters to sign up to a service that would pay them to cut their energy use if supplies ran short.
Although it is confident that Britain can avoid blackouts, National Grid will run 12 one-hour demonstrations of this new “demand flexibility service”, as well as investigating other ways for consumers to pay a bigger role in balancing electricity grids.
According to the company: “Creating more flexibility on our electricity system is vital for running a clean, green and fair system of the future.”
Energy experts have long argued that the participation of households and businesses in balancing grids — by manipulating how and when they use power — can be helpful during crises and in the longer term, in meeting net zero emission goals.
Many governments have focused primarily on wind and solar electricity generation to cut emissions but experts say targets cannot be reached without changing consumption as well.
“A lot of of buzz has been made on the supply side . . . but, actually, what is missing today is a commitment from businesses and consumers on the demand side,” explains Olivier Blum, executive vice-president of Schneider Electric’s energy management business.
Consumers’ ability to help balance electricity systems was demonstrated in California this summer, when households responded to text alerts from the US state’s grid operator to reduce consumption, as record-breaking temperatures boosted demand.
Now, energy companies are hoping Europe’s energy crisis and events such as those in California can persuade consumers to alter their habits more permanently.
“We have been fighting for five years, ten years to convince consumers [about making such changes], we don’t need to fight right now,” suggests Blum.
Changing electricity consumption will become particularly important as more of the UK’s 28mn homes switch from polluting gas boilers to electric heat pumps, and more drivers swap petrol or diesel cars for battery-powered vehicles.
In the UK alone, the switch to electric heat pumps is forecast to increase annual residential electricity demand by 50 per cent by 2035, according to National Grid forecasts. By 2050, demand during peak hours could double, which would require a significant increase in power generation assets and costly upgrades to electricity grids.
However, at the same time, many countries are moving away from reliable but polluting gas and coal power stations, which can quickly respond to increases in demand.
“At the moment, how we really keep the electricity system secure and balanced is through flexing gas use and paying gas generators [to fire up quickly to meet holes in demand],” says Sarah Honan, an expert in so-called flexibility services at The Association for Decentralised Energy, a trade organisation. “That’s really not what the future is going to be able to look like, nor is it what we want it to look like,” she says.
But the lifestyle changes involved in balancing the grid do not have to be drastic, Honan argues. National Grid has said most modern lights and televisions are so efficient that it is unlikely they will need to be turned off during its tests. Instead, it is asking participating households to consider using energy-intensive appliances, such as cookers and washing machines, at different times.
Honan adds that, in the future, households with electric vehicles will be able to charge their batteries when supply is plentiful and discharge some power back to the grid when needed. Some companies, such as Ovo Energy, already offer arbitrage products that allow EV drivers to make money using their car batteries.
Some heavy industrial consumers, such as chemical works, have been doing this for some time. They are able to use companies such as the Edinburgh-based aggregator Flexitricity to sell services to National Grid to balance the system.
Not everyone is convinced about widespread adoption, though.
Energy consultant Kathryn Porter of Watt-Logic points out that only 45 per cent of UK households have the kind of digital smart meter that will allow them to participate in flexibility services.
She also argues that the incentives behind the National Grid scheme are relatively low — and some households “may simply decide it’s not worth the effort”.
“Clearly, as the energy transition progresses and more consumers have access to smart appliances, electric cars, and heat pumps, demand response could play a key role,” Porter wrote in a blog.
But she added that the “market is not ready for this yet, with fewer than half of businesses and households being equipped with suitable meters”.
Where climate change meets business, markets and politics. Explore the FT’s coverage here.
Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here