A smarter, more flexible energy system, enabled by smart meters, is on the horizon
Cornwall Insight worked with Smart Energy GB to understand the benefits of a
smart meter enabled flexible energy system. The Power of Flex – rewarding smarter energy usage considers how if we, as households, use our energy more flexibly we can save money on our bills, and support a low carbon system. That system will, in turn, cost less and ensure against over-building of energy infrastructure.
Household flexibility involves consumers increasing, decreasing or shifting their electricity use in response to a signal (for example, a message from their energy supplier or a change in electricity price), to help manage the electricity system. This might typically mean using less electricity at peak times and more at off-peak times. As a result, the system will cost less to operate, will rely less on expensive gas and imports, and will better support cheaper renewable energy. The benefits of this cheaper system can be passed back to all of us at home.
The modelling in The Power of Flex demonstrates it is a ‘win-win-win’ for using energy more flexibly at home: consumers win, the environment wins and the energy system wins.
By taking a ‘snapshot’ view of Britain in 2025, 2030 and 2040, we were able to see that:
Without household flexibility the market would need to build the equivalent of four new gas-fired power stations for 2030.
Household flexibility could allow us to avoid the cost of building and associated disruption to local communities and environments that four new gas fired power stations, or the equivalent 1000 new wind turbines, would likely incur.
Managing flexible demand technologies like electric vehicles, heat pumps, solar and storage to avoid peaks and support the energy system means in 2030 we could avoid 3GW of peak demand on the network. This would lead to a saving of almost £1bn in spending on the electricity network.
Flexible households can save around 52% in 2040 on expected wholesale electricity costs compared to a situation where we have limited or no flexibility from households. But even those households who can’t or don’t want to take part in flexibility will benefit because of wholesale market cost reductions enabled by others taking part in flexibility.
Engagement with household flexibility results in a 45% increase in carbon savings in 2040 compared to a scenario with no flexibility − this is the equivalent of planting 630,000 trees.
In 2040, consumers and the energy system benefit from £14.1bn in savings if we embrace flexibility. These savings come from lower wholesale electricity prices and lower peak demand which reduces the need to build additional power stations and network assets.
The energy system of the future will have us, as consumers, and flexibility at its heart. Smart meters are a cornerstone technology for this win-win-win future providing the data and information critical to support future benefits for households, environment and the energy system.
About smart meters
Smart meters are a tool to help consumers access the benefits of moving their energy use away from times of peak demand and provide near real-time information about energy usage and access to Time of Use Tariffs. Without a smart meter, benefits including those from the Demand Flexibility Service cannot be accessed, because most traditional meters do not tell your supplier when you use energy.
About the Cornwall Insight Group
Cornwall Insight is the pre-eminent provider of research, analysis, consulting and training to businesses and stakeholders engaged in the Australian, Great British, and Irish energy markets. To support our customers, we leverage a powerful combination of analytical capability, a detailed appreciation of regulation codes and policy frameworks, and a practical understanding of how markets function.
About Smart Energy GB
Smart Energy GB is the not-for-profit campaign supporting consumer awareness and understanding of the benefits of smart meters for Great Britain. To learn more, visit www.smartenergyGB.org.
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