A white paper published on 10 March 2022 by the smart energy specialist geo and the heating manufacturer Vaillant warns that the absence of a common technical language between household electrical devices puts billions of pounds of household energy savings at risk1. The paper, DSR flexibility for domestic heat pumps, calls for a cross industry consortium to agree common standards so that heat pumps, EV chargers, solar PV, battery storage and white goods can manage the demand they place on the grid1.
The paper states that flexible use of the electricity network could reduce energy bills by £12 billion a year by 2050, citing BEIS's Modelling 2050: Electrical Systems Analysis report of December 2020, which found that system flexibility including demand side response could yield up to £12bn per year in reduced costs and reduced carbon intensity1. It also warns that electrifying both heat and transport for the home will lead to the grid becoming overloaded if just 10 to 20 per cent of existing households install heat pumps, and that the potential for overloads will drive expensive grid upgrades unless flexibility is implemented1.
The paper identifies a lack of common standards as the barrier, saying this will create complexity, increase costs and ultimately cost consumers billions of pounds in lost savings1. It calls for a consortium of stakeholders including distribution network operators, energy retailers, DSR service providers, Customer Energy Manager and Energy Smart Appliance manufacturers to develop mass-market solutions capable of adoption in Great Britain and in international markets1.
Steve Cunningham, chief executive officer of geo, said:
"But the increase in demand that electrification will drive can only be affordable if we have a much more flexible approach to managing demand on the Grid. To do this we need common standards across the sorts of smart appliances which are increasingly becoming part of the modern home. That is why we are calling for a cross industry consortium to establish common standards to make a more flexible grid a reality: we cannot allow a lack of industry coordination cost British consumers £12Bn a year."
Mark Wilkins, director of technologies and training at Vaillant, said heat pumps are key to achieving the government's 2050 net zero targets as a low carbon, low-regret solution to heat UK homes, and that a plan is essential to ensure the energy system can support their widespread adoption1. The paper concludes that coupling heat pumps with additional storage can offset the increased electricity demand they create, either by reducing the power the heat pump needs at peak times through thermal storage or by offsetting it with battery storage or vehicle-to-grid1. It adds that reaching the Committee on Climate Change's goal of 21 million heat pump installations between now and 2050 will likely require hot water storage or battery storage to provide demand side response at peak demand1.
Why it matters for households
The savings at stake are described as reductions in system costs rather than guaranteed bill cuts, and the £12bn figure is a 2050 projection for the whole system, not a per household sum1. What the paper sets out is a mechanism: if appliances can shift their demand to times when low-carbon electricity is cheapest and most abundant, the grid avoids the peak overloads that would otherwise force reinforcement, and those avoided costs are what the paper says could reach households1. The paper notes that flexibility would let EVs and appliances run off-peak automatically1.
For a home, the practical question is whether a heat pump, an EV charger and other smart devices can be operated together by a single energy management system, which the paper says depends on standards that do not yet exist1. The paper also links heat pump uptake to storage, noting that hot water cylinders or batteries are likely to be needed to provide demand side response at peak times1. The paper does not set out what any of this would cost an individual household, and no timetable for the proposed consortium has been reported1.
What happens next
The white paper calls for a consortium of distribution network operators, energy retailers, DSR service providers, Customer Energy Manager and Energy Smart Appliance manufacturers to be formed to develop mass-market solutions for Great Britain and international markets1. No date has been reported for its formation, and no government or regulatory response to the paper has been reported1.