Today, we wake up to a new Britain under a new, Labour leadership. This leadership proposes welcome actions to make Britain a clean energy superpower – and decarbonise the British power system by 2030. This will focus efforts, but it will also be a sprint. And the technology line-up is still missing the key ingredient that will make this vision real or illusory: energy flexibility.
So welcome Labour – and here’s what we, the flexibility industry, need from you to help you deliver on your pledges.
Accelerating to Net Zero energy
To hit Net Zero clean energy by 2030, your party policies share that the sector will require:
- Four times more offshore wind
- Three times more solar power
- Twice as much onshore wind
This is welcome. All of these technologies can deliver very low-cost power. But note that this is only when (and where) the wind is blowing, or the sun is shining. When it is not, our system is still very much dependent on flexible gas.
You also plan to invest in four supporting technologies as renewable back-ups:
- Carbon capture, utilisation, and storage (CCUS) to let us keep burning gas – yet which won’t be ready at scale by 2030
- Hydrogen, still at least a decade from scale
- Nuclear power, with a development cycle closer to 15 years
- Marine energy, which most experts now agree unlikely to ever be economic at scale
Something else could partner with renewables and unlock Net Zero energy (on a P50 basis) and on a five-year time horizon: low carbon flexibility.
In particular, we would point you to the many, many small but flexible energy assets that are popping up at the edge of the grid.
These are primarily energy storage assets – which you say you’ll “embrace” – such as batteries, and flexible demand technologies – think commercial and industrial processes, electric heating and cooling systems and electric vehicles.
You already recognise that “economic growth, energy security, lower bills, and addressing climate change can be complementary.” Let’s reinforce those ties and bring low carbon, distributed flexibility into the mix.
Clean power by 2030 through flexibility and flexibility markets
Energy flexibility markets, helping optimise the use of clean energy and available network capacity, are already here – partially. Electricity network operators are required to buy flexibility ahead of upgrading physical network.
The UK is already world leading in the scale achieved in these markets, with the flexible capacity tendered doubling year on year.
The ESO’s demand-side flexibility programme (the Demand Flexibility Service (DFS)) also operates at the national level using demand response. It has already proven that it can bring millions of new flexibility providers to market.
That means consumers providing flexibility in exchange for financial rewards at any time, as part of a “normal commercial service.”
It has run for two winters, delivering 7,000 MWh in flexibility in total to boost grid performance. Its success means that the ESO will now consult on extending the programme to become a market feature throughout the year.
Yet, to help Britain move away from gas power, connect the growing number of clean technologies and assets, and reach Net Zero, flexibility needs to scale faster.
To hit your targets by 2030, you need flexibility markets – which can deliver real value:
1. Upgrade our transmission infrastructure
Your manifesto policy recognises that delayed grid connection dates are in turn delaying or losing “important business and infrastructure investment.” You propose working with industry to “upgrade our transmission infrastructure and rewire Britain.”
Flexibility markets can help make more efficient and effective use of network infrastructure alongside building new generators to connect new industries.
Markets can therefore enable system operators to connect and manage more variable wind and solar generators. It can connect more clean, domestic assets such as electric vehicles and heat pumps.
And it can help support connections for data-intensive – and economically important – industries such as AI.
2. Cut bills for domestic consumers – and businesses
Flexibility can help consumers – both domestic and commercial – see the cost benefit of generating energy from wind and solar, rather than gas.
Gas is an expensive source of generation, setting the final or “marginal” electricity price when it’s used. A large enough flexibility market will enable us to meet the short fall in renewables with clean flexibility – which means gas will no longer need to set the marginal price.
The system will instead benefit from zero-marginal cost power from wind and solar. The price of energy will drop for consumers.
This will help you to make investment in British industry competitive again, rather than being “held back by high electricity costs,” as your manifesto currently states.
3. Boost Great Britain’s energy security
You also plan to “harness clean power to boost our energy security.”
Rewarding storage and demand response assets to use power at the right time right and location, responding to market price signals, can help ensure electricity is available when needed.
Growing the market size to ensure more flexibility from clean energy sources therefore means plenty to call on to shore up the security of energy supply for Britain.
4. Kickstart economic growth
Finally, on top of the clear economic benefit from the above, businesses, like Electron, are still calling for innovation to be a cornerstone in clean energy policy going forwards – which can continue to make Britain the best place in the world to found new startups driving Net Zero.
Unleashing more market size through investment is the key to getting that scalable innovation.
Make flexibility and clean energy economically rational
The opportunity is there, but flexibility as it stands hasn’t reached its full potential. The full value should incorporate that cheaper power, faster connections, more energy security. That isn’t currently included in the flexibility market size so it’s not getting the required investment to make it scale.
We need to grow the flexibility market size to encourage investment and enable the market to deliver solutions.
Rather than investing in gas subsidies, let the market deliver value instead. Instead of choosing technologies – like carbon capture, utilisation, and storage (CCUS) or green hydrogen – to deliver Net Zero, the market can help offer direction.
We therefore need to put the true costs from not investing in flexibility – a dependence on gas – into the markets and let technology and investment help drive solutions for your manifesto pledges.
If you can help us make it economically rational to use clean energy, you’ll get a flood of investment to engage these new assets – and that will accelerate Great Britain to becoming a clean energy superpower.
We’re excited to work with you.
