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Insights

Balancing the system

By 2030, most of our electricity will come from low carbon generation sources such as wind, solar, and nuclear. At the same time electricity demand will increase as transport and heating become increasingly electrified. New technologies will help us to change the way we use energy, not only helping to balance the system but reducing overall system costs, benefitting all consumers.

Image to show someone working at the National Grid ESO

National Grid ESO

National Grid ESO is responsible for ensuring that supply meets demand for every second of every day, and the frequency of the system remains at 50Hz.  This is a complex, challenging role given that demand and supply both fluctuate with weather, seasons, planned or irregular events such as those swayed by television programmes or events. Ensuring the smooth running of the grid requires the system operator to work with power generators to provide ‘ancillary services’ – a set of processes that keep the power system in operation, stable and balanced.

Flexibility

System flexibility is the ability to adjust supply and demand to achieve that balance, and to help manage locational constraints on the networks over different timescales, from minutes or less to across seasons or even years.

To integrate the scale of low carbon technology coming on-stream (including a four-fold increase in offshore wind and five-fold increase in solar), the energy system will require a huge increase in flexibility provided by energy storage, interconnectors, and demand-side response, from around 13GW in 2023 to 50GW by 2030. The expansion in low-carbon technology alongside flexibility on the supply-side and demand-side will ensure that the future Net Zero energy system has sufficient supply during challenging periods. Studies show that a flexible grid could save the UK £10-17 billion per year by 2050 by reducing the need for dedicated back-up generation and grid reinforcement requirements to meet peak demand.

The changing grid

Flexibility in today’s grid is mainly supplied by unabated gas generation but the ambition to operate a Net Zero grid by 2035 means finding other solutions. The Government, with the regulator Ofgem, has set out an approach to delivery in the joint Smart Systems and Flexibility Plan

Batteries and demand-side approaches like smart EV charging can provide shorter duration flexibility for frequency response, energy balancing and demand peaks (durations of under four hours).

Large-scale long-duration energy storage (LDES) like the pumped hydro stations already in use across the UK can support longer peaks and weather variations, and dispatchable low carbon generation (such as gas generation paired with carbon capture technologies, hydrogen power and bio-energy) are still expected to play a role in future.

Interconnectors that connect our system to that of other nations, and other developing technologies like hydrogen storage, compressed air energy storage and more can also be expected to play a part in keeping the future system in balance.

All of these technologies present an opportunity for the UK to be a global leader in flexible technologies, and show significant potential for investment and international trade.

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Constraints

When power generation exceeds the physical capacity of the local grid to export it, this causes a constraint on the network, and often means that generation has to be curtailed, i.e. turned down or turned off.

Alongside the necessary increase in ambition and delivery of network expansion, energy flexibility can relieve network constraints – in the short-term whilst networks are being expanded and in the long-term by helping to reshape demand so that it better aligns with supply.

Demand-side activities

Flexibility can also be provided at the demand side by customers varying their usage so they draw less or more from the grid at specific times.

Customers shifting their usage away from ‘peak’ periods reduces overall system costs and saves all consumers money by reducing the need for extra generation, and network capacity to be built.

Shifting demand away from periods when the grid is usually referred to as demand-side response or DSR. 

Industrial DSR

Most DSR currently is provided by larger industrial and commercial users. Through the ESO’s programme known as Power Responsive businesses can make money, save on bills and lower carbon by shifting energy use in real time.

This could include temporarily switching off fridges in supermarkets, or amending manufacturing processes to use electricity in non-peak times.

DSR for homes

It’s not just businesses that can take advantage of flexibility. The growth of controllable low-carbon technologies (LCTs) in the home, such as electric vehicle charging equipment, heat pumps, storage heating and domestic batteries mean more people can advantage of demand shifting. When these small individual loads are aggregated across a range of homes and businesses into a single coordinated response, they can help to close the gap between supply and demand.

The emerging market for smaller assets to play into whole-system balancing is developing at speed across both small to medium enterprises and domestic markets. Government has recently developed smart standards for low carbon technologies, following work by Energy UK and BEAMA to set out the options for smart charging standards.

Whilst the electrification of heat and transport will increase overall electricity demand, by using smart technology customers can play a key role in helping to balance the system, bringing overall system costs down. Many of these technologies are automated, for example ‘smart charging’ – where EV charging is automated to respond to grid signals, taking from the grid when electricity is plentiful, and giving back to the grid in periods of low generation.

Future of Smart Charging

Demand Flexibility Service

Following the invasion of Ukraine in 2022 and the disruption this caused to global gas supplies, the UK’s System Operator developed additional winter measures to ensure that system margins remained adequate. These included contracting retired coal plants to stand by and procuring a new DSR-product.

Energy UK supported the System Operator with the development of the service so that it could be designed, procured and approved in four months. To encourage untapped domestic and non-domestic DSR to come forward, approved providers were guaranteed twelve one-hour tests between November 2022 to March 2023 at a minimum price. This supported providers to engage and allowed industry and the System Operator to test customers response and the reliability of ad hoc, day-ahead domestic DSR as a balancing tool. 

The success  of DFS can be built upon so that domestic DSR (both automated and manual) can play a larger role in everyday system balancing.

Options here include continuing the reform of the retail market to enable suppliers and others to offer more time-of-use tariffs and bundled energy products to provide a sufficient incentive for customers to change their behaviour. This would need to be progressed alongside the reform of balancing markets to ensure price signals encourage the right behaviours.

Across the whole market, the delivery of smart meters and energy efficiency measures are critical in enabling these business models to be delivered.