How we’re helping National Grid ESO to deliver the Demand Flexibility Service

Through our role as an Approved Provider to National Grid ESO, we’re working with energy suppliers and tech partners to offer Demand Flexibility Services to homes and businesses across the country, enabling a more secure, reliable and efficient power network for all.

Unless you’ve been hiding under a sizable rock lately, you’ll have likely seen, heard, or read in the news about National Grid ESO’s new Demand Flexibility Service.

The Demand Flexibility Service – or DFS – has hit the headlines for good reason. With unprecedented strain on the grid presenting a very real threat of countrywide blackouts this winter, DFS has become a vital new energy market mechanism to help keep homes and businesses supplied with uninterrupted power.

At SMS, we’ve been leading the way in enabling this critical new service for consumers (and the incentives and rewards made available via the scheme), working in partnership with energy suppliers and other energy tech businesses in our role as a National Grid ESO Approved Provider.

You can read more about our role and the aggregation services we have delivered across National Grid’s first set of “live” and test events here.

What is the Demand Flexibility Service?

Dubbed by as a “national energy-saving scheme”, the Demand Flexibility Service (as it is officially called) helps the electricity system operator (ESO) manage electricity demand over winter, incentivising households and businesses for shifting their power usage away from peak times through various reward schemes on offer.

Consumers must opt-in to the service via either their energy supplier or other service provider (such as smart meter apps, like Loop.homes or Hugo Energy), and the rewards on offer to consumers depend on which of these suppliers or providers you sign up with. Importantly, the scheme requires customers to have an electric smart meter installed.

Those who are signed up are given up-to 24 hours’ notice via their DFS provider to shift their power usage from a peak period – typically 4pm to 7pm the following day – to encourage using power hungry appliances, such as tumble dryers or washing machines, outside this timeframe.

Why do we need the Demand Flexibility Service?

The UK’s Electricity System Operator (ESO) launched the DFS in November 2022 to help protect the grid from unprecedented strain anticipated over winter months due to a combination of gas shortages across Europe, colder-than-normal weather, and heightened domestic electricity demand.

It has even been warned that in a worst case scenario Britain could experience enforced and prolonged power cuts that would cause significant economic and societal disruption. Confronted with this very real risk, DFS has been devised as part of National Grid and Government efforts to ensure Britain maintains a robust, secure, and reliable energy supply.

However, DFS is no temporary stop gap or a one-winter-only scheme. With demand on the grid ever growing due to the uptake of electric vehicles and installation of electric heat pumps alongside the increased use of intermittent renewable generation, demand flexibility will be increasingly essential to the efficiency and stability of our national power network. That means the Demand Flexibility Service is likely here to stay for the long term.

What role does SMS play in all this?

As an Approved Provider of the Demand Flexibility Service, SMS is working alongside other providers in our key role as an aggregator. Firstly, SMS collects the consented data from users’ smart meters who are opted-in to the scheme (via our smart data platform, n3rgy).

Using this data, we then use our intelligent aggregation software, FlexiGrid, to calculate the actual demand reduction during the event period, relative to the baseline consumption in the same period. SMS sends individual demand reduction figures (for every MPAN that participated in the event) to our partners so that incentives can be passed on to their end-customers.

Overall reduction values are simultaneously sent to National Grid ESO, who pay Approved Providers per MWh of demand reduction during the period.

How have the first Demand Flexibility Service events gone?

A flurry of test events took place in November and December 2022 during the cold weather snap, followed by a further test on 19th January 2023, with SMS providing services on three of these events to our partners, Loop.homes and Hugo Energy App, and their opted-in customers (enabling a total 11.23MWh demand reduction across all three tests).

Then, on Monday 23rd January and Tuesday 24th January, we helped deliver National Grid ESO’s first ever ‘live’ events – where a total 1.6GW demand reduction would be required across the country to help balance the grid due to expected network strain.

Over the first live event, which took place between from 5-6pm, we helped reduce electricity demand from nearly 13,500 households (opted in via Loop.homes and Hugo Energy App) which equated to a 6.2MWh reduction in use. That’s the same as turning off nearly 6,500 washing machines for an hour or (not) making nearly a quarter of a million cups of tea!

The following day between 4.30pm and 6pm, we went even bigger and better, enabling an 8.72 MWh reduction in electricity consumption across just over 14,000 households – a 40% increase in demand reduction compared to the first live event.

Broadly speaking, both the series of test events and first live events have been seen as a success, with households up and down the country participating and the numbers taking part growing with each event. Which is fantastic news for our grid and ongoing our energy security as country.

What does the future look like for DFS?

The more users that sign up to the Demand Flexibility Service, the more successful this scheme will be. However, that means providing consumers with the necessary choice and opportunity to take part.

There are a growing number of Approved Providers with whom homes and businesses can sign up with (from energy suppliers and smart energy apps, to other businesses like EV charging service providers and battery storage technology companies), but there needs to a greater range of these providers to sufficiently grow the market to where it needs to be.

At SMS, our goal is to enable this growth by providing partners with the specialist expertise and technology to access this innovative new marketplace, helping attract and maintain customers, as well as creating a reliable new revenue stream.

Whilst we are already working with the likes of Loop.homes and Hugo Energy App, we’ll shortly be announcing partnerships with other providers (including energy suppliers) to deliver Demand Flexibility Services to tens of thousands more customers across Britain.

How to get involved

If you are an energy business interested in working with us on DFS, get in touch with our specialist team over at FlexiGrid – flexigrid@sms-plc.com.

If you are a consumer and want to take part in the next DFS events, you can sign up with the free to use apps, Loop.homes or Hugo Energy, or enquire with your energy supplier about this service (you can see all National Grid ESO Approved Providers here)