Millions of households and businesses free to reap rewards from flexing energy use

Millions of British households and businesses may now be able to benefit from greater flexibility in how and when they use electricity, following changes to metering rules that open the electricity market to more consumers. 

The updates enable those with electric vehicle (EV) chargers, heat pumps or batteries to participate more easily in flexibility markets, potentially accessing lower tariffs, bill credits or other incentives through energy suppliers or third-party aggregators. 

Removing barriers to participation 

Until now, most devices were unable to participate due to metering requirements. The new rules, developed over the past two years with industry participants, mean that anyone with an EV charger, heat pump or battery may now be able to benefit further by helping to regularly balance the grid.

With electricity demand projected to treble by 2050 and with renewables generating more clean energy than ever before flexibility will be key to maintaining an electricity system. Opening participation in the Balancing Mechanism to households and businesses is expected to enable a more flexible and sophisticated electricity network, helping to reduce balancing costs, boost affordability, and drive clean economic growth across Britain. 

Until now, participation has been limited by metering requirements. The updated rules, developed with industry over the past two years, reduce these barriers, allowing more households and businesses to take part in balancing the electricity system.

With electricity demand expected to increase significantly by 2050, and as renewable generation continues to grow, flexibility will play an increasingly important role in maintaining a secure, affordable and clean electricity system. Expanding access to the Balancing Mechanism is expected to support a more flexible and responsive electricity network, helping to manage system costs and support the transition to a low-carbon energy system 

Supporting a flexible, clean energy system 

Fintan Slye, Chief Executive of NESO, said: 

“Abolishing outdated metering requirements to allow millions of households and businesses to benefit from rewards for flexing their energy use is an exciting and historic milestone in the way Britain is powered.   

“Consumers will now be free to play an active and regular role in supporting sustainability from the comfort of their own home or workplace. And NESO will be able to utilise aggregated assets instead of switching on more expensive power stations - reducing costs for everyone, and helping us on the journey towards clean power by 2030.

“This is a critical step towards building a more decentralised, digital, and flexible system, capable of supporting Britain’s move to electrified heating and transport. We hope it will help unleash new entrants to the energy market, supercharging innovation and clean growth for Britain.” 

The changes mean that if generation is high, to avoid wasting green energy, an aggregator or supplier might for example automatically charge EVs or batteries faster with clean surplus energy. Or they might temporarily increase heat pump temperature to prewarm a premises or home in a way that works for the consumer.    

Conversely, if national demand is high, consumers might agree to have their EV charging automatically paused or slowed down within charging parameters that work for them. Or they might opt to have their battery export small amounts of stored energy. This would all be in return for benefits – such as lower tariffs - offered by their supplier or aggregator.    

 Martin McCluskey, Minister for Energy Consumers, said: 

“Millions of people are already making savings by using electricity when it is abundant and cheaper.

“This change will help even more consumers benefit, supporting households with electric vehicles, heat pumps or batteries to bring down their bills by using electricity flexibly.

“This is an important step towards a flexible, clean and innovative energy system, which puts consumers first.

Households and businesses have previously been able to provide demand side flexibility to NESO through the Demand Flexibility Service, which typically procured relatively small amounts of energy for the grid in advance, happening a handful of times a month. Under the scheme, consumers enjoyed benefits which included things like money off bills or rewards for taking part. Britain was the first country in the world to introduce such a national service, and it already has nearly 2 million households signed up. 

These changes mean consumers will now be free to participate much more frequently in the more immediate Balancing Mechanism traditionally the reserve to large generators like power stations or wind farms, which are asked to switch on or off on a short-to-real-time basis. The reforms open the way for millions of smaller domestic and business assets to provide or store power for the network as a group similar to the way in which a power station would operate today. 

The reforms follow an independent review and successful evidence-based trials with Octopus Energy, EV Energy and Pod Point. It means household devices no longer need expensive, highly accurate, specialist meters. Standard domestic EV chargers, heat pumps and batteries can participate using their existing technology. 

By removing metering barriers, it is hoped businesses specialising in EV charging, smart heating, and home energy management can compete in a new market that was once reserved for large generators, bringing new benefits to end consumers. It opens doors for aggregators, suppliers, and flexibility service providers in a market that is expected to grow substantially.

Dhara Vyas, Chief Executive of Energy UK, said: 

“As our energy system continues to transition towards clean power, it’s important that customers can make the most of a more dynamic market. Giving households the opportunity to help balance the grid and be rewarded for it through lower bills or other benefits is a great first step.

“This change from NESO is welcome, it’ll help to ensure that households can continue to use smart products and services effectively. I look forward to continuing our work together to tackle the barriers customers face and make sure demand-side solutions can compete on a level-playing field.” 

Pilgrim Beart, Vice President of Energy Services at Pod, said: 

“At Pod we make the benefits of flex accessible to all, by rewarding our customers with cash every time they smart charge their EVs at home, making it more affordable for people to make the switch to electric. This has only been made possible thanks to a forward-thinking approach from NESO in reforming metering requirements."