Over millions of years, energy from the Sun was captured in the Earth’s crust as plants and animals turned into coal, oil, and natural gas.

Since the Industrial Revolution 250 or so years ago, people have been extracting these fossil fuels at a large scale, storing them, and burning them to provide energy when and where it is needed. This releases greenhouse gases and causes dangerous climate change, so instead we are looking to the original source of this energy – the Sun – to power our societies.

How will we generate enough electricity?

The power we get from the Sun (and the wind it causes) goes up and down over minutes, hours, days, and seasons. We can’t just turn it on when we want. So how do we keep the lights on?

Part of the solution is how much generation capacity you have – the higher the total amount you can generate, the more likely you are to be able to cover a given level of electricity demand. The falling price of solar panels suggests significant capacity increases are feasible.

Then you can also ensure that the generation technology is spread over a large area. Even if one area is cloudy or still, chances are another will be sunny or windy. An example of this is the Octopus Energy-backed project to import power from Morocco to the UK.

And we’ll need to use or store as much of the electricity generated as possible, whilst avoiding big peaks of demand - spreading out use and using energy when it’s most available.

Spreading out when we use electricity

Changing when we use electricity to match when it’s available is called ‘demand flexibility’.

It’s been an important part of our electricity system for a long time. Many people will be familiar with Economy 7 tariffs and electric storage heaters, which encourage usage overnight, a time when there is generally less demand from households and businesses.

But as we generate more renewable electricity, and use more electricity for things like electric vehicles and heating, flexibility is becoming even more important – and potentially valuable.

Renewables will need us to use electricity more flexibly

In the future, our energy grid will be powered almost entirely by renewables. This means that we won’t be able to suddenly dial up energy generation to meet big spikes in demand the way we can now. Although adding more storage will help, we’ll still need to find ways to keep those spikes as small as possible.

The more households that can use electricity flexibly the better, because we will need to build less new generation to meet peaks in demand (and less wires to get the power to where it is used), and so we will keep bills lower for everyone.

Encouraging households to be flexible

So in the future, more products and services will be available to encourage households to use electricity flexibly

Energy companies might charge different prices to use electricity over the day, pay customers to use less electricity at specified times, or even provide cheaper rates in return for allowing devices in people’s homes, like heaters, to be remotely controlled.

Some households are better positioned to be flexible than others. If you have technologies like solar panels, a battery, or an electric car, you can use them to avoid buying electricity from the grid when it is expensive. You can restrict your use to when power is cheap, and maybe even sell electricity back to the system.

But not everyone can be flexible

Social factors matter too. For example, large households, especially those with children, are likely to have less ability to vary when they use power to do things like cook or run the washing machine. Far from making savings, such households risk being even more exposed to high electricity prices than they are today.

Ofgem, the energy regulator, has rightly emphasised the risk of leaving households or communities behind in the low carbon transition. Not only would this be unfair, but it could jeopardise wider support for the transition, and also miss out on maximising the extent to which we could be flexible.

There are Government backed programmes to encourage the development of services aimed at households on lower incomes or in vulnerable situations, such as Inclusive Smart Solutions, but more is needed.

Exactly who will be worse off?

We need to improve our understanding of who is most likely to win or lose from the growth of flexibility, and why.

We need to understand whether there could be wider patterns to this across the country. For example, could social, economic, and technical differences from place to place make existing divides worse, or even create new divides between households?

While we know there are promising responses in the face of some of these challenges – such as the role that housing associations can play in widening access to low carbon technologies – we need to understand more about the barriers that are preventing us taking faster action at a regional and national scale, and how these can be removed.

Importantly, we need to make sure that policymakers and industry are aware of the risks and opportunities here, and act accordingly.

Why should we worry about this now?

We’re at an interesting period for flexibility in the UK. Recent years have seen the introduction of the Demand Flexibility Service, where households are rewarded for turning down their demand at certain peak times during the winter. Time of use tariffs aimed at making electric vehicles (EVs) and heat pumps cheaper to run are increasingly common. But they are still relatively niche offerings.

In the coming years, the incentives for energy suppliers to encourage their customers to be flexible are expected to increase (due to changes in the way suppliers account for the energy they use). Combined with the increasing uptake of tech like heat pumps and EVs, “smart tariffs” that promote flexibility are likely to become more widespread.

This means we have a chance now to be proactive. Aiming for a system where flexibility benefits a broad range of households from the beginning is more likely to deliver energy fairness, rather than waiting and reacting only once problems have become locked in. Making this a goal in policy, and agreeing on ways to measure and evaluate success, will go a long way towards both anticipating and avoiding challenges, as well as helping recognise them if and when they inevitably arise.

Making flexibility fair

It’s for this reason that as part of its goal to reduce household emissions by 30% (from 2019 levels) by 2030, Nesta will be working to enable a broader range of households to provide and benefit from flexibility.

We've just kicked off our first project in this area, partnering with the energy supplier Utilita to understand their prepayment meter customers’ experience of taking part in the Demand Flexibility Service last winter.

If you or your organisation is doing work in this area and would like to chat, please get in touch with Mike Fell.