Ofgem to encourage flexible use of cheap off-peak energy | Energy industry

Ofgem is pushing ahead with plans to make it easier for British homeowners to reap the benefits of using electric car chargers and heat pumps at non-peak times, as the grid becomes more reliant on wind and solar power.

The energy regulator for Great Britain has put forward proposals to encourage flexible electricity use in the home by creating a single register in which flexibility service providers (FSPs) can access more markets and better rates for owners of energy assets such as EV chargers or battery storage systems.

The move is part of a drive to shift consumers and businesses to more flexible energy use as demand increases and the grid becomes more reliant on intermittent low-carbon energy sources, such as wind turbines.

Under the current system, FSPs, which aggregate flexible energy assets on behalf of customers, must sign up multiple times to access different local and national flexibility markets across the country, meaning customers can often miss out on the best rates.

The new streamlined system will include creating a “one-stop sign-up point” that would give FSPs access to all flexibility markets, meaning customers have more chance to benefit from lower tariffs at times when demand is low or supply of electricity is high.

Ofgem said the current complicated system was a barrier to entry for millions of small-scale energy assets to access markets, and prevented consumers from obtaining maximum value from their equipment.

The need to use electricity more flexibly comes as domestic energy use is set to increase by 50% by 2035 amid the increasing take-up of EVs and heat pumps, while energy production is increasing due to come from more intermittent energy sources such as wind and solar as the UK tries to achieve net zero emissions targets.

The regulator said its shake-up should drive more flexible energy use and could contribute to an estimated £30bn to £70bn in savings and lower bills for all consumers by reducing the need to build as much expensive infrastructure.

A number of energy providers and distribution networks have already begun providing flexibility services to homeowners to avoid overloading the grid at peak times.

This includes Octopus Energy, whose Go electric tariff manages the charging of 150,000 electric cars, and provides lower tariffs for owners to charge in the quiet hours of the night.

National Grid has also run a series of demand flexibility days since last January which saw households and businesses paid to cut back on their electricity use during the peak period of usually between 4pm and 7pm.

Ofgem director Eleanor Warburton said: “We are already starting to see real acceleration in small scale flexible energy use as consumers increasingly access cheaper energy through more flexible consumption … Asset registration will create a streamlined one-stop sign-up point, which will help maximise consumer participation.”

The regulator also announced on Monday that it had appointed Elexon as its new market facilitator to develop local flexibility markets. The facilitator, which is expected to be fully operational by early 2026, will act as an independent expert to help drive alignment between national and local distribution networks.