UK Power Networks to save bill payers £400 million

Building on the previous tenders run over the last six years, UK Power Networks is now procuring flexibility across 1,000 areas in London, South East and East of England, where customers can opt in to be paid for ‘flexibility’ during periods of peak electricity consumption or excess renewable generation by changing their pattern of energy use – for example charging their electric car at a different time. This will unlock more than 500MW of capacity, equivalent to 300,000 homes over the next three years.

Sotiris Georgiopoulos, Head of Smart Grid Development at UK Power Networks said: “This is a critical time for all energy networks. We need to accommodate more electric vehicles and heat pumps, along with the continued growth of solar and wind generation. We have been using flexibility since 2017 to accommodate growth in demand for electricity, but for the first time we will also use it to help more renewables connect and generate electricity, something no other operator has done at the scale we’re proposing.

“This is a key part of our wider plans to support the transition to Net Zero at lowest cost. Our latest business plan excluded more than £400 million of network investment on the basis that we plan to manage many parts of our network more cost-effectively using flexibility. These are real savings which are being passed on directly to bill payers”

UK Power Networks is calling for flexibility in local areas where electricity demand or generation is expected to outstrip the capacity of substations and cables, sometimes only for a few hours per year. This flexibility can come from large electricity generators, grid-connected batteries or from homes and businesses that are able to change their usage patterns. Participants earn payments for supporting the network, while lowering costs and connection times for everyone.

William Goldsmith, Head of Grid and Data Services at ev.energy said: “As the flexibility market continues to grow, we are starting to see first-hand the value it has to offer for everyone. UK Power Networks are leaders in this space and have played a key role in helping us ensure our customers feel the benefits of flexibility. By using smart technology to make small adjustments to when their electric vehicles are charged, EV drivers using the ev.energy app are saving money, supporting the grid and the transition to Net Zero. I’m excited to see that UK Power Networks is extending its use of flexibility – including to help absorb local green energy that would otherwise be wasted.”

Without flexibility, distribution networks would need to upgrade equipment or build more infrastructure to manage peak demand or to reduce the output of generators. Flexibility can be cheaper and less disruptive than network upgrades, and help get more zero-carbon energy produced by solar and wind farms onto the network.

The scheme is open to businesses with at least 10kW of flexibility in a constrained area. Households may participate through registered energy suppliers or aggregators. Participants need to register their capabilities on Piclo (an online marketplace for flexibility), before being assessed by UK Power Networks.

With energy costs continuing to rise, an estimated 8 million households will be in fuel poverty by the end of the year. Flexibility has the potential to reduce system costs for customers and by investing in flexible energy solutions, UK Power Networks hopes to both deliver savings to customers and lower carbon emissions across the network.

Participants must pre-qualify for the tender by January 31^st, 2023, with the earliest contracts for delivery beginning in Summer 2023.