Demand Flexibility Certificates – Increasing the Visibility of Demand Flexibility through Certification

Increasing the Visibility of Demand Flexibility through Demand Flexibility Certification

The majority of the electricity consumed in the UK now comes from low-carbon sources. In the second quarter of this year, fossil fuels accounted for only 37% of total generation. Meanwhile, renewables and nuclear accounted for over 50% of the total. Power generation is fundamentally shifting away from fossil fuels, and we are seeing renewable energy production at levels 30 times higher than 25 years ago. 

At the same time, energy prices are the highest they have been for a long time, with wholesale gas and electricity prices dramatically increasing following the invasion of Ukraine, reaching x10 at their peak. 

 Although energy prices have eased more recently, consumer bills remain at roughly double historic levels, and this winter households are bracing for bills as high as last winter’s. In addition to this, customer service levels have fallen, with the number of people reporting difficulties contacting their supplier has doubled since 2018, customer satisfaction levels have fallen and the public are less trusting of energy suppliers than of service providers in other sectors.  

These unwelcome news are partly due to changes in Government support. However, they are also a symptom of a bigger problem, which is the fact that as we move towards a net zero society, energy systems will become increasingly reliant on Demand Flexibility for their optimal, and cost-effective operation. 

National Grid ESO’s Demand Flexibility Service has demonstrated the usefulness of Demand Flexibility at the system level. However, the role of Demand Flexibility as a system resource is still being consolidated, and there’s much work to be done in terms of defining the net zero policies relevant to the standardisation of Demand Flexibility metrics and increasing the ‘visibility’ of the Demand Flexibility potential itself. 

The buildings sector is set to become the most numerous sector of prospective Demand Flexibility providers. National Grid ESO’s report on Future Energy Scenarios of 2023 estimated that, by 2040, flexible Demand Response from residential, commercial and industrial sectors could provide between 6-12 GW of Demand Flexibility. By 2050, it is envisaged that between 10-12 GW of Demand Flexibility could be harnessed from the residential sector alone. 

Up until now, however, the Demand Flexibility potential of the buildings sector has been largely untapped. This can be attributed in great measure to the lack of robust frameworks that allow for producing reliable and consistent estimates of the Demand Flexibility potentials afforded by individual assets at the household, dwelling or building level. To address this issue, the Flexibility Theme at the Energy Demand Research Centre (EDRC) have set out to develop a Demand Flexibility Certification framework that aims to fill some of the void in the net-zero policy space, allowing for a structured assessment of the Demand Flexibility potential of individual buildings. 

In their new report, the Flexibility Theme introduces the concept of Demand Flexibility Certificates and lays the methodological foundations for establishing a Demand Flexibility rating system. 

Demand Flexibility Certificates are akin to the Energy Performance Certificates in the sense that they provide buildings with a rating, only that instead of being for general Energy Performance, they are specifically intended to summarise the potential for providing Demand Flexibility at the building level. Having the ability to produce Demand Flexibility Certificates would prove highly beneficial as it would serve three main purposes. 

Firstly, a Demand Flexibility Certification framework would allow for identifying opportunities to improve Demand Flexibility potential of individual buildings/providers. Having a clear idea of both what is available and what is achievable is a necessary first step when it comes to engaging in Demand Flexibility provision. Therefore, any prospective Demand Flexibility provider would be better suited to do so if guidelines and frameworks exist that allow for a systematic analysis of the Demand Flexibility potential of one or a combination of buildings. 

Secondly, a detailed mapping of the Demand Flexibility potential of individual buildings would provide reliable pictures of both the current state of and prospects for making use of such Demand Flexibility potential at the local, regional and national levels. In the first instance, this can inform system planning and management decisions in relation to network reinforcement needs and temporary buffering opportunities. 

Thirdly, understanding how much we can use the existing Demand Flexibility in different areas, like local, regional, and national levels, will show where it is most important to invest. This will help making Demand Flexibility even stronger, especially in places where network constraints are most problematic, and reinforcements are too difficult or too costly. Whenever it is determined that the need for network reinforcements is unavoidable, this can also help in identifying the parts of the network which should be placed at the top of the list of priorities. 

In essence, a building’s Demand Flexibility Certificate would become a currency of sorts, which would allow both prospective Flexibility providers and Flexibility users to quickly and reliably assess the value that a building could offer. This would, in turn, be reflected in a Demand Flexibility market that is able to operate in a more efficient manner. 

The Flexibility theme will continue to work on further developing their proposed Demand Flexibility Certification framework, as well as investigating the barriers and opportunities for implementation.