Ofgem published a call for input, "Smoothing the Journey: engaging domestic consumers in energy flexibility", on 17 August 2023, seeking stakeholder views on how to enable a large proportion of domestic consumers to take part in demand side response (DSR)1. The response deadline is 29 September 2023, with replies to be sent to consumerflexibility@ofgem.gov.uk by 17:00 that day1.
The document states its purpose as gathering information "on how to enable a large proportion of consumers to transition from being passive billpayers to flexible energy consumers"1. It focuses on domestic consumer participation in electricity DSR, which it describes as consumers adjusting their energy consumption in response to the needs of the energy system and being rewarded in return, either manually or automatically through a third party known as a Demand Side Response Service Provider1. Ofgem says industrial and commercial consumers already provide over 1.2GW of DSR, while domestic and small non-domestic participation is at early stages of adoption1.
The call sets out the scale of change expected on the system. Ofgem cites predictions that demand will increase by 50% by 2035, that the number of electric vehicles in the UK will rise from over 1 million today to 11 million by 2030, and that government has set a goal of deploying 600k electric heat pumps per year by 20281. It also cites government aims to increase offshore wind capacity from 14GW in 2022 to 50GW by 2030 and expectations that solar capacity will rise from 14GW today to 70GW by the end of the decade1. Ofgem states that low carbon flexibility in the energy system may need to increase from 10GW in 2021 to 30GW by 2030 and 60GW by 2050, and that domestic DSR could reduce the cost of managing the electricity system by £10 billion a year by 20501.
On consumer experience, Ofgem points to the Electricity System Operator's Demand Flexibility Service trial in winter 2022/23, run through 31 energy providers and aggregators, in which 1.6 million households and businesses signed up and collectively reduced or shifted peak energy demand by 3.3GWh1. It notes that 51% of survey respondents received rewards of £1 to £5 over the full winter period the service ran1. It also cites modelling by the EV Energy Taskforce finding that domestic EV charging prices will be 25% higher without smart charging, and states that government has set out its intention to mandate that all hydronic heat pumps, storage heaters and heat batteries up to 45kWh rated thermal capacity must have smart functionality1.
"The purpose of this CFI is to gather information from stakeholders on how to enable a large proportion of consumers to transition from being passive billpayers to flexible energy consumers"
Why it matters for households
The document frames flexibility as a shift in the household's relationship with electricity. Most consumers today have what Ofgem calls a linear relationship with their supplier, paying for the energy they consume and occasionally switching tariff1. A flexible consumer instead responds to market signals, often through assets such as an electric vehicle or a heat pump, so that electrified equipment supports the grid rather than adding strain at peak times1. Ofgem states that as a general rule it does not expect flexible consumers to be manually monitoring time-of-use tariff prices, and that the simplest and most common route is expected to be automatic1. The financial stakes described in the document are system-wide: £10 billion a year in avoided system management costs by 2050 if domestic DSR scales, and a 25% higher domestic EV charging price without smart charging1. Ofgem also warns that if domestic DSR is designed for and adopted by only a small subset of the market, a large proportion of consumers will miss out on the benefits1. The document does not set out any new consumer entitlement, payment or protection; it asks whether facilitation or policy intervention is needed1.
What happens next
Responses are due by 17:00 on Friday 29 September 20231. Ofgem says it will consider all responses, may publish non-confidential responses, and will share responses with the Department for Energy Security and Net Zero1. It plans to hold workshops in the autumn with stakeholders on the findings of the call for input1. No further dates have been reported.