The need for flexibility in the evolving energy landscape

As the energy industry undergoes a significant transformation, understanding the concept of flexibility has never been more critical. With new (and mostly renewable) energy generation, coupled with fluctuating demand patterns across consumer groups, it’s an increasingly complex task to ensure our power systems remain balanced.

The key to all that is flexibility; what it means, its historical context, and why it’s essential for a sustainable energy future.

What is flexibility?

At its core, flexibility in the energy sector means the ability to adjust energy supply and demand in real-time. The power system must constantly balance supply with demand to prevent blackouts or inefficiencies. This balancing act requires both moving demand up or down and adjusting generation as needed. For example, during peak demand flexibility can help reduce demand or increase generation to match it.

Flexibility also encompasses energy storage solutions, such as batteries. These allow power to be stored and ready for release when demand peaks. In essence, flexibility is about keeping the power system in equilibrium, moment to moment.

The historical context of flexibility

Traditionally, the UK’s power system was more-or-less a one-way system that relied on flexibility from a relatively small number of large fossil fuel power stations and some pumped storage. Customers at home or in business would call on the power they needed and those generation sources would quickly respond and change their operations to meet that demand. It’s the old story about half-time cups of tea during the FA Cup Final . . .

However, as we shift toward renewable energy sources such as wind and solar — which are inherently less flexible as we can’t make the sun shine or the wind blow — we face new challenges. In the 1990s, fossil fuels dominated the energy mix, but today, renewables are on the rise, going from 1.6% in the mid-nineties, to almost 15% in 2013 and accelerating  to 52% between April and June 2024. That growth demands a shift in how we approach energy generation and management.

The challenges ahead

Looking to 2030 and beyond, the energy landscape is set to change dramatically. As we transition to more renewable energy sources, the inflexible nature of solar and wind becomes a critical issue. This trend means traditional methods of balancing supply using large fossil fuel plant will no longer suffice; we will need innovative solutions to manage the variability and ensure a stable power supply.

Added to that, the increasing changes to our lifestyles – such as generating our own power from solar panels, running a heat pump instead of a gas boiler, swapping a petrol car for an EV – increases the amount of renewable energy we will need to live our lives. Each new EV charger can roughly double a household’s peak power demand, placing additional strain on local distribution networks.

A new approach: systems thinking

The evolution from a centralised power generation model to a more decentralised one requires a shift in how we think about flexibility. No longer can we rely solely on large power stations and one-way energy flow. Instead, we need a systems approach that incorporates a diverse range of flexibility resources.

This involves understanding the various players in the energy system:

• Consumers and prosumers: Modern consumers not only consume energy but also generate it, becoming prosumers. Their ability to adjust their energy usage or production can provide significant contributions to system balance. Instead of a small number of large power stations, we now have potentially millions of small assets such solar panels, batteries or EVs that can add up to a significant amount.
• Energy system operator: Responsible for ensuring the stability and resilience of our national energy system. Having used flexibility to balance traditional energy sources such as coal & gas generation, they are innovating their market offering to embrace the new and changing energy system.
• Distribution system operators (DSOs): As local energy needs grow, DSOs must manage local generation and consumption, requiring a deeper understanding of flexibility and what’s availability locally. Increasingly, they are procuring flexibility as a cheaper and faster alternative to building unnecessary infrastructure.
• Aggregators and energy suppliers: These intermediaries can pool flexibility from multiple small sources — for instance, individual prosumers — and enter it into energy markets, ensuring that even small contributions are recognised and utilised.

The path forward

In September 2024, the UK closed its last coal fired power station, bookmarking the start of the end of the traditional energy generation system. The energy system of the past is already shifting to this new way of generating renewable power.

Flexibility will be the crucial ingredient in the energy system as we accelerate towards a net zero grid. It will help consumers and prosumers to use their energy more efficiently, help balance the grid and make use of renewable power when the wind blows and the sun shines.

This means investing in technologies that allow consumers to adjust their energy usage, as well as enhancing storage capabilities to store excess renewable energy for later use.

At E.ON, we are already investing in the infrastructure needed to support a more flexible grid, for example our partnership with Quinbrook to build a 230MW battery in Newport, South Wales.

Customers also have a part of play in balancing the grid, and given the right incentives and propositions, can incorporate energy flexibility into their daily lives. E.ON is also developing market leading propositions with partners to deliver real time energy management for our customers, so they can make the most of the energy in their home, and reap the financial and environmental benefits of energy flexibility.

E.ON have also partnered with Amber to help E.ON Next customers with solar PV, batteries and electric vehicles to earn money while helping the grid to stay in balance.

Embracing flexibility is essential for a resilient and sustainable energy future. Everyone has a part to play as we adapt to this new energy landscape. At E.ON, we are the playmaker of the energy transition, working with all players to achieve a balanced, efficient and sustainable power system.

The time for flexibility is now.

José Davila is E.ON UK’s Director of Strategy and Innovation. His career includes more than 25 years in energy, water and utilities, with spells in innovation consulting. José has worked in FTSE-100s and multinationals, run his own business and taken a sustainability start-up to first revenues.