Across leading energy markets, grid flexibility is becoming a core part of how utilities plan and invest. In the UK, every distribution system operator (DSO) now evaluates flexibility alongside traditional “wires” solutions, asking a simple question: can flexibility deliver the same outcome but faster and cheaper?
That shift has unlocked billions in system value in the UK. Utilities are increasingly using flexible demand, storage, and distributed generation as non-wires alternatives to manage congestion and defer reinforcement, helping enable a more cost-effective grid.
The structural challenges that US utilities face are similar, whether investor-owned, cooperative, municipal, or system operator: limited capacity, delayed connections, and growing pressure to optimise investment for consumer affordability while integrating distributed energy resources (DERs). Flexibility offers a practical, proven way to manage these challenges while preserving investment agility.
And when DER flexibility is treated as another grid service or asset, five clear sources of value emerge.
Five ways grid flexibility drives system value
1. Bridge to build-out: Maintaining reliability while controlling near-term costs
Flexibility manages local network constraints when upgrades are delayed or under construction. It keeps reliability up, avoids costly emergency interventions, and prevents diesel generation from creeping into operations. It’s the grid-equivalent of keeping a patient stable until surgery is available.
2. Deferral or downsizing: Cutting capital costs through smarter timing
Flexible demand, storage, and DERs can reduce or postpone the need for physical reinforcement. When upgrades are deferred until they are truly necessary, utilities save capital, improve investment timing, and avoid building capacity that load growth may never actually require.
3. Faster interconnections: Accelerating DER and customer access
By managing constraints dynamically, utilities can allow new customers and renewables to connect sooner through flexible arrangements. This speeds DER integration, supports local economic growth, and squeezes more value out of existing infrastructure while long-term upgrades move through planning and permitting.
4. Strategic optionality: Making investment more agile and less risky
Flexibility gives utilities a hedge against uncertainty. Deploy what you need now; invest later when forecasts on demand, technology cost curves, and policy direction are clearer. Optionality reduces stranded-asset risk and aligns planning with least-cost principles.
5. Cleaner operations: reducing carbon while maintaining stability
Flexible resources allow the system to rely more on renewable generation and responsive demand, and less on fossil-fuel backup or renewable curtailment. The emissions benefits arrive alongside operational savings and improved system stability.
Flexibility as a toolkit
These five benefits provide a flexibility toolkit of operational options. Each application links an input – such as flexibility procurement or data visibility – to an output: capacity created, costs avoided, reliability improved.
The UK tracks these benefits across three headline categories that together span the full planning and operations lifecycle.
Network visibility forms the foundation, giving DSOs the confidence to operate closer to limits and revealing where bridge-to-build-out or optionality decisions make sense. DSO flexibility, the market-based procurement of services, captures the reinforcement-deferral and risk-reduction value streams.
And flexible connections and smart solutions translate directly into faster connections and better utilisation.
How the value starts to scale
Across the 2023–28 price control period, UK DSOs are saving nearly £2.2 billion across these three areas, demonstrating that the five underlying mechanisms of flexibility deliver measurable benefits.
The DER asset owners providing the flexibility also benefit from new value streams as a result of the push for DSOs to procure flexibility and the concerted effort to deliver value – creating a self reinforcing cycle whereby DERs are incentivised to show up to deliver that value and capacity to the grid.
It’s this toolkit approach that has allowed the UK to start the process of scaling flexibility within a regulated environment and to report tangible system value.
Lessons for US utilities
The UK experience proves that the value from DER flexibility is real. It aligns with every grid benefit regulators already care about and complements traditional investment, expanding the toolkit utilities can use to meet their performance and affordability obligations more efficiently.
But capturing and proving that value requires orchestration: the ability to uncover, connect, and coordinate distributed energy resources across the system so that flexibility potential becomes operational value.
For US utilities, this is the next step. The US has been doing procuring flexibility through long-term contracts for years, but orchestrating it with ongoing insights can turn DER flexibility into an integrated strategy that delivers measurable system value.
