The Energy System as swan swimming – calm on the surface, a different story underneath

Turbine or not turbine: how innovative demand management can slash the cost of tackling the energy crisis

By Knauf Insulation UK & Ireland
May 20, 2022

Hidden from view a spectacular high wire balancing act is performed every moment of every day.  National grid must ensure the electricity fed into the grid from power stations equals that consumed. Or the lights go out. Imagine Wallace & Gromit frantically managing an array of levers – the nuclear power stations are tricky to turn off, so stay on.

The wind power lever has a mind of its own so if it turns off, you need to turn on the quick response gas power station. But the gas ‘lever’ carries a ‘high-carbon use sparingly’ warning, so do the French have spare nuclear power available on the undersea interconnector? A reservoir of power sits atop a Welsh mountain – water pumped-up overnight ready to drive turbines at a moment’s notice - but that lever is saved for when the Coronation Street adverts send millions to their kettles.

Most of the levers have only two positions; on or off. The high wire balancing act is achieved by managing supply upstream and not our demand for electricity downstream. The refrain from those that don’t like wind or solar power says ‘it can’t be turned on when needed, therefore ‘reliable’ power (gas, nuclear or even coal) must fill the gap when the wind doesn’t blow or the sun doesn’t shine’. ‘Reliable’ does carry qualifications; two of the technologies are highly polluting, one subordinates energy security to producer countries while nuclear is struggling to show capacity can be built on time and to a reasonable budget.

So Wallace and Gromit’s lever pulling becomes ever more feverish as more variable renewable generation levers – with a mind of their own as to when they are on or off – are added and dependable levers which are in their control are turned off …permanently. As if this weren’t difficult enough, the plan is to move the bulk of UK heating away from gas and onto the electricity grid over the next decade. At the time of the ‘Beast from the East’ cold snap, gas demand outstripped electricity demand four times over. Remember, you must build enough power stations to meet absolute peak demand (with some reserve) if the high wire balancing act is to be maintained.

How do we make intermittent renewable generation work?

The answers lie in the flexibility of the levers. When performing our high wire balancing trick of neither too much, nor too little, electricity on the grid (while demand swings wildly), binary positions – on or off - offer little flexibility.

Consider instead the levers that don’t look like traditional power stations. The French interconnector has both ‘import’ and ‘export’ settings as well as ‘off’. Dinorwig, our Welsh mountain, has ‘on’, ‘off’ and ‘store energy’ positions allowing it to take excess wind power off the grid overnight to pump water to its mountaintop reservoir to be dropped through turbines when needed. The operators might even be paid to take excess energy off the grid at night. Paid to pump water uphill and paid again to let it drop.

But tunnelling through mountains and laying undersea cables can only be a small part of the answer. If we are to succeed in our net zero aspirations, flexibility must extend into managing demand in our homes. Digital has disrupted too many sectors to list, but it has lagged in hooking up smart systems to operate our home heating, charge our cars and manage our white goods.

What does flexible electricity demand in our homes look like?

With heat electrification being the tough nut to crack, let’s begin there. Consumer offers might be pitched along the lines of ‘guaranteed running cost of a retrofitted low-carbon electrically heated, flexible home to be in line with the cost of their gas heating’. Perhaps even lower running cost if budget allows.

A simple consumer offer built on homeowner operating cost. Under the bonnet of that offer would be a host of technologies including smart home efficiency measurement to assess the speed of heat loss through the walls and roof and a low energy retrofit to reduce overall space heating demand. Once home characteristics are improved & re-measured, smart controls will know how far that home can be heated away from peak electricity demand times in what winter temperatures, while remaining warm and comfortable. Instead of putting energy into the system, it is taken out by a combination of measured energy efficiency improvement and technology.

Alongside charging the home fabric with heat, controls can drop the temperature of the freezer, operate other white goods like washing machines and dishwashers at times that work for the grid. Now less energy is needed for basic functions like heating, car or wall mounted batteries can compete with Dinorwig to fill up when the wind is blowing overnight ready to resell to the grid when supply is scarce, and prices are high.

Networked homes as virtual power stations

Clearly service providers must aggerate many Welsh mountains worth of homes operating them in concert. Once multiple homes are linked, each with multiple devices, able to operate at times of maximum convenience to the grid and lowest cost to the occupants, additional ‘offers’ could be made to the user network. In times of supply constraint or national need (the wind isn’t blowing for a long period or sanctions on an aggressive fuel producing nation), a service provider app might request volunteers to turn down the heating by 1 degree. Cost of living support might be offered through ‘heat donations’ via the network.

The under the bonnet technologies can, and should, evolve as will the service providers competing to offer ever more varied demand-side flexibility. Or rather they will if the UK Government’s innovation strategy works with our regulated energy market to offer them a reason ‘why’.

Who do I ring for measured home efficiency improvement and smart home energy management?

There is no business model equivalent to Dinorwig’s, no market to launch these services into, no way a service provider can make a profit, nor reward home occupants for both improving home efficiency and flexibility. There are instead Gov innovation programmes[1] ploughing £100ms into technology candidates they hope will solve the problem while some of those technologies already exist as part of commercial offers outside the UK. UK energy innovation strategy falls into the trap[2] of making a series of ‘big technology bets’ rather than a focus on creating the fertile ground that will reward those that solve the problem with a market to enter.

How can we rapidly drive a demand side response industry?

We sent an open letter to the Secretary of State listing steps that could be taken in the short term to put us on the right path. Government must answer the ‘why’ quickly – why should anyone solve the demand side flexibility challenge when government is the gatekeeper to market creation… but doesn’t act? Wallace and Gromit’s challenge will only get harder as more renewables are hooked up to the grid. Energy policy must give them the levers to maintain the high wire balancing act or our net zero ambitions, and our energy system as a whole, will fall over.


[1] Flexibility Innovation Programme - GOV.UK (www.gov.uk)  Heat Pump Ready Programme - GOV.UK (www.gov.uk) Smart Meter Enabled Thermal Efficiency Ratings (SMETER) Innovation Programme - GOV.UK (www.gov.uk)  

[2] Questioning the Entrepreneurial State Status-quo, Pitfalls, and the Need for Credible Innovation Policy