The Demand Flexibility Service Explained

The Demand Flexibility Service (DFS) is a national scheme that pays homes and businesses for changing when they use electricity. It was designed to ease winter evening pressure on the grid by cutting demand at peak times and reducing reliance on more expensive generation¹. It launched in winter 2022/23 and is administered by the National Energy System Operator (NESO), with households taking part through a registered supplier, aggregator or app¹.

The headline numbers are large. In its first winter, 1.6 million households and businesses took part and collectively shifted 3.3GWh of electricity, saving over 3,300MWh, enough to power around 10 million homes across Great Britain³. Over 2.6 million homes and businesses have taken part in previous years, and the service has saved an estimated 7,000MWh of electricity at peak times, enough to power the lighting in 54,000 homes for a year⁵.

For an individual household, the sums are much smaller. Financial rewards have typically been between £1 and £5 per event, and recent payouts have been closer to £0.5 per kWh⁶. The service is voluntary, free to join, and carries no penalty for sitting an event out⁶.

What the service actually does

The DFS rewards people for changing the times when they use the most electricity¹⁰. It was designed to make it easier for homes and businesses to take part in the electricity market and be rewarded for shifting when they use electricity, and originally to help manage potential winter pressures by reducing demand during evening peak periods¹. It was built to be accessible to any household or business with a smart meter⁹.

The mechanism is a turn-down event. The system operator tells providers that it wants demand reduced in a given window, providers notify their customers, and customers who cut their use relative to their normal pattern are paid for the difference. The pressure points are typically weekday evenings, between 4pm and 7pm⁹. Each event usually lasts for around an hour in the evenings when demand for electricity is at its peak⁵.

The service has since widened. The fourth iteration, launched on 14 April 2026, rewards customers for both reducing electricity use (demand turn-down) and increasing electricity use (demand turn-up)⁹. Up until then it had only been used in the opposite way, when there was pressure on the grid¹¹. The updated scheme now offers free or cheaper electricity during sunny, low-demand periods¹². The service, in place since the winter of 2022/23, is being extended to homes and businesses¹².

The figures: what has been delivered

The published results fall into two groups: what the service has delivered in aggregate, and what an individual household can expect.

On the aggregate side, the numbers are consistent across official and independent sources. The first winter saw 1.6 million households and businesses sign up and collectively reduce or shift peak energy demand by 3.3GWh¹³. The government's statutory security of supply report gives the same participation figure and the same saving of over 3.3GWh⁴. Energy UK reports that 1.6 million households and businesses supported the service by shifting demand, saving over 3,300MWh of electricity, enough to power around 10 million homes across Great Britain³.

The service then moved to a year-round footing. From December 2024 to March 2025, DFS delivered 3.9GWh of flexibility across 44 events⁴. Between December 2024 and April 2025, 11,900MWh of shiftable electricity demand was procured¹⁴. Energy Saving Trust puts the cumulative saving at an estimated 7,000MWh of electricity at peak times, enough to power the lighting in 54,000 homes for a year⁵.

At household level, the figures are modest. Financial rewards for DFS participants are typically small, between £1 and £5 per event⁶. Recent payouts have been closer to £0.5 per kWh⁷. The service has cost around £11 million a year to implement at its peak⁷.

What drives participation and reward size

The reward a household receives depends on how much electricity it can shift, and that depends on what it uses at peak times. The service rewards people for changing the times when they use the most electricity, so a household with little peak-time electricity use has little to shift¹⁰.

The Centre for Sustainable Energy identifies which households tend to earn more: homes with electric heating (but not night storage heaters that charge up overnight), homes with at least one adult and two or more children with gas heating, and those with an electric vehicle charged at peak times⁶. People living alone in homes with gas heating tended to earn low rewards⁶. For Economy 7 or special EV tariff customers, participating will not provide much saving, because there is no high peak-time usage to reduce⁶.

Motivation is not purely financial. Of those surveyed by the system operator, 76% selected financial benefits as their main motivation¹³. But research on smart prepayment customers found a variety of motivations beyond bill savings, especially around learning about energy saving, enjoyment, and treating events as an opportunity to disconnect and do something different¹⁵. Where participants were able to be flexible, it was mainly through manual changes in the timings of activities, often against a background of already low electricity use¹⁵.

The reward mechanism itself varies by provider. The electricity companies are paid a set amount by the system operator for every kWh of electricity their customers shift. Some pass all of this on to participants, others only pass on some of it, and others enter their customers into a prize draw instead⁸. Rewards vary depending on your supplier, but the more electricity you save during each event the greater your rewards will be⁵. Rewards can take the form of pounds or points that you can use towards paying for your energy bills⁵.

How events are called and measured

An event is the period when a household is asked to reduce its electricity use. It is normally for one hour between 4pm and 8pm⁸. Notification tells you the date and time of each event, and this might be on the same day or the day before⁵. In the 2023/24 season, most events were held in the evening peak, for one hour between 4pm and 8pm, with customers notified by their provider the day before; that year customers could be notified the day before or in the morning of the event³.

Measurement rests on a baseline. The baseline is calculated on each half hour of the day for either the 10 most recent weekdays (for weekday events) or the four most recent weekend days (for weekend events)⁸. To create that baseline, a provider needs a smart meter capable of sending half-hourly readings, a baseline measure of the last 60 days of electricity usage, and marketing consent². Customers must authorise their provider to access their smart meter so it can be read every half hour for the duration of the service³.

The reward is then based on the difference between normal use and event use. If a household normally uses 10kWh during peak time and uses 3kWh during the DFS event, it will have reduced its consumption by 7kWh (70%)⁸. That reduction, priced at the provider's rate, becomes the reward.

Who can take part, and the smart meter requirement

The service is open to anyone who wants to reduce their energy consumption, including households and businesses². It was designed to be accessible to any household or business with a smart meter⁹. It is also being offered to small businesses, working in the same way as the version offered to homes and requiring a smart meter².

The conditions are specific. Participants must live or have a business in England, Scotland or Wales, get energy from a registered supplier or third-party app, and have a working smart meter so the supplier can accurately and quickly measure energy use⁵. You can also take part using registered third-party apps that connect to your smart meter⁵. Consumers without a smart meter can request one from their energy supplier at no extra cost².

Participation is completely voluntary, so you only take part if it works for you². Participation is always voluntary and customers can choose whether to take part in each event⁹. It is free to take part and you do not lose anything if you do not manage to shift any electricity use⁶. DFS is voluntary and there are no penalties for not participating³.

The rules that protect participants

The DFS sits inside a wider consumer protection framework. Ofgem's load control guidance sets out the licence conditions that apply: treating customers fairly, recommending suitable services and prohibiting mis-selling, allowing customers to exit a service, and a requirement that any fees charged by flexibility service providers which are associated with a customer's service exit must be proportionate¹⁶.

Beyond the licence conditions, there is a voluntary compliance scheme. Flex Assure states that limited formal regulation currently covers how providers sell, deliver and support flexibility services for homes, and that its code fills that gap, setting clear standards now so consumers are protected while the market develops¹⁷. The code sets enforceable rules on sales, onboarding, rewards, data, and complaints¹⁷. Its supporters include the regional Distribution System Operators who manage local electricity networks, and NESO's Power Responsive programme¹⁷. NESO's registered provider tables show whether providers are members of the Flex Assure compliance scheme¹.

Consumer bodies have set out the principles they expect. Flexibility offers must be fair and inclusive for consumers, and there must be clear, transparent information and fair terms and conditions¹⁸.

The exclusivity rule is the one participants most often meet. You must not sign up to an equivalent demand flexibility scheme with another provider while signed up to a given scheme, and the system operator only lets users participate in one scheme at a time¹⁹. The same rule applies across the equivalent schemes¹⁹.

How it differs across the UK nations

The service does not run in Northern Ireland⁵. Participants must live or have a business in England, Scotland or Wales⁵. Northern Ireland has separate energy market and grid arrangements, so the scheme's eligibility wording excludes it.

Within Great Britain, the service has been delivered across 12 regions, to help ensure flexibility is used where it is most needed⁹. In future versions, payments may vary depending on where flexibility provides the greatest benefit⁹. For the fourth iteration, however, the DFS pays the same price across all regions⁹.

Regional variation is a familiar feature of the wider energy market. The default tariff cap level varies across Great Britain, because the costs of transporting energy from the generation source to the customer, the network charges, vary by region²⁰. The DFS has so far avoided that pattern in its pricing, but the direction of travel points towards locational payment.

Flexible schemes and tariffs more broadly are available to selected customers from selected suppliers, and eligibility and availability vary, with consumer action required²¹. That caveat applies across all four nations: even where the DFS operates, not every supplier offers it, and the terms differ.

What it means for household energy independence

The DFS is a grid service, not a self-sufficiency measure. It reduces the need to turn on fossil fuel power plants by lowering energy use at peak times⁵. Domestic flexibility services like DFS cut emissions by displacing fossil-fuel generation³. Energy flexibility means adjusting the balance of supply and demand to keep the system running smoothly, such as moving energy use away from peak times or using more energy when renewables generate more²¹. By using energy flexibly, a household helps to balance supply and demand in our energy system, meaning less pressure on the system at peak times and preventing energy being wasted¹⁰.

That is a system benefit, and it is worth being precise about what it does not do. Taking part does not reduce a household's dependence on the grid, a supplier or a manufacturer's platform. It deepens the relationship with all three: the household needs a registered provider, a working smart meter sending half-hourly data, and often an app or aggregator to receive event notifications. The reward arrives through the supplier, on the supplier's terms.

The distinction matters when set against a definition of independence. Grid electricity independence is the percentage of electricity consumed in the property over a year which is met by either behind-the-meter solar or electrical storage, and grid electricity independence is the fraction of electricity consumed in the property which is met by self-consumed electricity²². The DFS does not move either figure. It changes when electricity is drawn, not how much comes from the grid.

Where the service does help is in the wider flexibility picture. When supply is tight, the options are to reduce or shift energy demand, increase local generation, or discharge a battery²³. A household with a battery or solar can act on all three; a household with only a smart meter can act on the first. The DFS pays for the first, and the fourth iteration extends that to paying for using more electricity when renewables are generating⁹.

The scale is also worth keeping in perspective. The service could be three times larger, an increase of 1GW, according to Energy UK's 2023 assessment³. At its peak, when most successful, it cost around £11 million a year to implement⁷. Against the cost of building peaking plant, that is small; against a household's bill, the reward is smaller still.

The history, and what replaced or extended it

The DFS launched in winter 2022/23¹. It started in late 2022 and encouraged people to lower their energy use during peak times over the winter months⁵. The first live session, on 23 January 2023, saw 400,000 customers participate and receive £3.37 per kWh of electricity demand they reduced¹³. The service ran between November 2022 and March 2023²⁴.

The first winter's results were substantial. Between November and March, 1.6 million households and businesses participated, according to the system operator¹³. The scheme was then extended. For winter 2023/24, changes included the lead time given by the system operator, changes to metering requirements, and the ability for providers to make the service opt-out rather than opt-in¹³. The core service that year ran from 30 October 2023 to 31 March 2024³. The system operator paid providers overall £3,000/MWh of turn-down for the first six one-hour tests, likely to happen before 31 December; the price paid for the final six tests depended on the available volume in the market, and if combined volume exceeded 1.25GW the auctions for the final six tests would be fully competitive³.

The structural change came in November 2024. The DFS transitioned from being a winter-only emergency measure to an all-year-round service⁹. It became a year-round service and moved to operate as an in-merit margin tool from 27 November 2024¹. Since November 2024, changes allow households and businesses to participate across the entire year, instead of being limited to just the winter months². In 2024 the DFS was changed to an all-year-round scheme¹⁴.

The fourth iteration launched on 14 April 2026 with several important changes: a reduced eligibility threshold of 0.1MW, the introduction of bi-directional flexibility, zonal procurement, and primacy and a self-nominated baseline option¹. A lower minimum participation threshold makes it easier for more providers and customers to participate⁹. From 7 October 2026, DFS will launch the capability to procure constraint management actions, and participants will be able to take part in both margin and system tagged actions¹.

The evidence on how it lands with households

The service has been evaluated at scale. NESO has drawn on over 23,500 consumer perspectives¹. The system operator surveyed 23,717 people, got 134 to keep diaries explaining their experience, and interviewed 329 people¹³.

The findings are mixed. Participants showed variable levels of understanding of the reasons why DFS events happen¹⁵. The irregular and infrequent nature of DFS events meant that changes were generally acceptable, although the idea of making them more constant was less attractive¹⁵. There was little presence of low-carbon technologies like solar panels, domestic batteries, heat pumps and electric vehicles among the participant sample¹⁵. The small sample of participants cannot fully represent prepayment customers¹⁵.

On fairness, the picture is more positive than earlier analysis suggested. No concerns around the fairness of rewards were heard among participants, unlike in forum analysis and previous DFS evaluation¹⁵. The research recommends that policymakers and system planners take a more strategic interest in knowledge, awareness and satisfaction alongside demand response magnitude¹⁵. Mechanisms that could increase reliability include recognising consistency of response as well as magnitude, supporting automation of response, gamification approaches, seeking commitments or pledges to respond, and providing tips on effective energy saving¹⁵.

The participant base has not been representative. In the system operator's survey, 95.7% of respondents fell within the white ethnic category, compared to 82.7% of the British population, and only 2.4% of respondents were Asian British, compared to 8.7% of the British population¹³.

For a household weighing up participation, the practical picture is this: the sums are small, the effort is manual for most participants, and the benefit is to the system as much as to the bill. The service is free to join, voluntary, and carries no penalty for missing an event⁶.