Energy flexibility – all you need to know

Comment by Alex Buckman, Innovative Solutions Architect – Flexibility, at Energy Systems Catapult.

As the energy sector transforms to meet Net Zero, it must pivot from a centralised, fossil fuel-heavy system to a decentralised model focused on low carbon sources. Flexibility is the bridge that can make this transition smooth, reliable, and cost-effective, helping to unlock the potential of distributed assets to meet demand without overburdening the grid.

Distributed flexibility – what is it?

Flexibility is the ability to dynamically balance supply and demand, adjusting in real-time to fluctuations in demand. Traditionally, flexibility has come from the supply side, where fossil-fuel power plants could be ramped up or down to meet demand.

As we transition to a renewables-based energy system, this centralised model must change. Future flexibility will rely on ‘demand-side’ assets. These systems provide decentralised, distributed flexibility and adjust demand to match renewable supply. Flexibility enables renewables to be managed effectively, ensuring a consistent energy supply.

The value of distributed flexibility:

1. Managing the delivery of network upgrades: The logistical benefits of deferring reinforcement of both distribution and transmission network infrastructure.
2. Reducing capital and operational costs of the energy system: Distributed flexibility uses technologies that we would already have in our Net Zero system. Using them flexibly ensures that we maximise the use of low carbon, cheap wind and solar, avoiding expensive ‘peaking’ electricity generation, reducing investments in dedicated grid storage and the cost of high voltage electricity infrastructure.
3. Enhancing system resilience and reliability: The methods that we use to deliver distributed flexibility will also be vital for managing high-impact, low-probability events like if we need to re-boot the system after a black out without placing too much sudden demand on our networks.

Getting distributed flexibility to work for everyone

Distributed flexibility is valuable, but to unlock the true potential of it, we’ve got to make sure that it works for everyone from consumers and system operators to those delivering flexibility within our markets. Here’s what we should think about:

1. Get the flexible technologies installed – buying EVs and other flexible technologies is an important step in achieving distributed flexibility.
2. Make it available to the energy system – ensuring that technologies are both capable and available to be used as much of the time as possible.
3. Make it commercial – making sure that we can incentivise the right technologies to participate at the right times in the right places to benefit the whole system.

We can break down how to make this happen into four areas:

1. Start with the consumer. Consumers must be at the centre of a fair, affordable transition to Net Zero. They are the only stakeholders with a veto, so the system must provide outcomes they value. This needs us to change the way we sell energy – from selling kWhs to selling things that people value – like warmth, mobility and convenience. We must make flexibility from consumer assets almost invisible, with a competitive landscape where service providers compete to provide the best outcomes.
2. Build digital infrastructure. We cannot build an affordable, reliable and flexible Net Zero energy system without a robust digital infrastructure. Digital solutions must be developed for real-time communication, data sharing, and automation of flexibility services.
3. Build a Net Zero electricity system. In our ‘Innovating to Net Zero 2024’ report, we showed that electricity will need to be the backbone of a low-cost Net Zero energy system. Distributed flexibility can be a tool to reduce the upfront cost and help to deliver the reinforcement that we will need to build. To do this, they need to know that the distributed flexibility that they need will be available at the time and place in the network that they need it. This involves forecasting demand accurately, understanding the spatial needs of flexibility, and enabling digital controls to manage peak load demands in real-time.
4. Create an outcome-focused market, policy and regulatory environment. We need a revolution in energy retail to deliver the full potential of distributed flexibility. We want an energy system that delights consumers whilst reaching Net Zero. Creating a competitive and innovative market that uses distributed flexibility to unlock profitable business models is a key tool in achieving this. A supportive regulatory environment is indispensable for unlocking new propositions that consumers love, and flexibility providers can prosper from. Increasing spatial and temporal granularity of market signals whilst lowering regulatory barriers to innovators are examples of how to make this happen.

2030 and beyond

There are some amazing innovators working in distributed flexibility. Our Enabling Distributed Flexibility for Net Zero report looks ahead to make sure that they can grow and deliver the outcomes that consumers and the system need. By 2030, this new ‘frontier’ of flexibility needs to be fully operational across the UK, with millions of distributed assets able to automatically respond to system demands.

This article appeared in the April 2025 issue of Energy Manager magazine. Subscribe here.