The Demand Flexibility Service: explained

The UK - and much of the world - has been dealing with an energy crisis since 2021. To tackle this, the Demand Flexibility Service has emerged as a potential fix to balance the grid and lower energy costs for consumers.

Although the concept of mass-adjusting electricity consumption in real-time may sound like a complicated affair, over 1.6 million households have saved money by adjusting their electricity usage during the cost-cutting events. 

Here’s what the Demand Flexibility Service involves and whether it’s worth taking part.

What is the Demand Flexibility Service?

The Demand Flexibility Service (DFS) is an initiative by the National Grid Electricity System Operator (ESO), which is responsible for managing the electricity system in England, Scotland and Wales.

Launched in the winter of 2022/23, the DFS incentivises consumers to shift their electricity usage to off-peak times, which helps to smooth out demand spikes and reduces the need for additional (often fossil-fuel-based) power generation at the busiest times.

Why do we have the Demand Flexibility Service?

The National Grid ESO introduced the DFS in response to the sudden increase in gas prices after Russia's invasion of Ukraine in February 2022.

By encouraging smarter energy consumption, the DFS plays a crucial role in maintaining grid stability and preventing power cuts during periods of high demand.

It also reduces the reliance on fossil-fuel power plants, ultimately lowering carbon emissions and energy costs for everyone.

How does it work?

The DFS operates through a series of cost-cutting 'events', typically 12 per year, which run between November and March. Each event lasts an hour and they usually occur between 4pm to 7pm when electricity demand is highest.

After joining a DFS scheme, households get notified about upcoming events and they can choose whether to opt in. In return, they receive rewards from their energy suppliers, which can include vouchers, credits, or other incentives that can go towards their electricity bills.

National Grid ESO manages the DFS in partnership with various energy suppliers and providers. Not all energy suppliers are involved, but there are still ways to get involved if yours isn't (more on that later).

The most recent DFS events concluded on 31 March 2024. If the National Grid ESO approves the service for the 2024/25 winter, it will probably follow a similar schedule, with events starting in November 2024 and following the same annual cycle.

Who can take part?

The DFS events are voluntary, but if you would like to take part you need to be with an energy supplier that's already signed up for the scheme.

You'll need to sign up with your energy supplier or a third-party provider who will manage your involvement in the programme. The provider will send you notifications about DFS events and you can choose whether to take part each time an event comes around.

However, opting in does not oblige you to reduce your energy usage - it just means you’ll get paid for any reduction you do manage. 

Having a smart meter capable of providing half-hourly readings is also essential, as this allows for accurate monitoring of electricity usage during DFS events.

How do I take part?

To take part in the DFS, you need to sign up, have a smart meter installed, and allow your provider to access your smart meter.

Once registered with an eligible energy supplier or third-party provider, you'll receive notifications about upcoming DFS events, usually a day or a few hours before they occur.

To take part, you must opt into each event separately, usually through your supplier’s app, website, or via email. During the event, you’ll reduce your electricity consumption for the specified period. 

How much can you earn during a DFS event?

Earnings during a DFS event vary based on your energy supplier and the amount of electricity you avoid using.

According to the Centre for Sustainable Energy, on average, households can earn between £1 to £5 per event, depending on how much they cut their usage compared to their typical consumption.

For example, in winter 2023 any participating EDF customers earned up to £3 for each kilowatt-hour (kWh) of electricity they avoided using during an event.

Your exact earnings will depend on how much energy you shift from peak times and the specific terms offered by your energy supplier.

What if your supplier isn’t taking part?

If your energy supplier isn’t participating in the DFS, you can still get involved through third-party smartphone apps.

These apps connect to your smart meter and allow you to benefit from the DFS by paying out a percentage of the money they receive directly from National Grid ESO.

Here are some options, including their potential rewards per kWh saved in the 2023/24 period:

• Loop Energy: This app paid around £2.50 per kWh saved (around 80% of what it received from National Grid ESO), redeemable through gift cards at the end of the 2023/24 scheme.
• Hugo Energy: Paying around £2.40 per kWh saved (at least 80% of what it received from National Grid ESO), the reward was redeemable via PayPal at the end of the 2023/24 scheme.
• Equiwatt: This app paid out the second best amount at around £2.70 per kWh saved (around 90% of what it received from National Grid ESO), redeemable through gift cards at the end of the 2023/24 scheme.
• Ivie: Rather than paying out a set amount, this app allows you to earn entry points for various prize draws, ranging from weekly £25 Amazon vouchers to a £1,000 cash prize (the value of these equating to around 85% of what it received from National Grid ESO).
• uSwitch (uTrack): This app paid the top amount of £3 per kWh saved (100% of what it received from National Grid ESO), plus a bonus for first-time users, redeemable as a one-off payment at the end of the 2023/24 scheme.

These apps enable you to contribute to grid stability and earn rewards, even if your primary energy supplier isn’t involved in the DFS.

Has the Demand Flexibility Service been a success?

The DFS has shown promising results since its beginnings in 2022.

According to a 2023 report by the Centre for Sustainability for ESO, over 1.6 million households and businesses took part in the DFS in the 2022/23 period, saving over 3.3 gigawatt-hours (GWh) of electricity at peak times.

Take Octopus Energy as an example. In that same 2022/23 period, Octopus paid their customers up to £2.50 per kWh saved during peak times over 13 ‘Savings Sessions’, and it engaged at least 700,000 participants.

Collectively, these participants saved nearly 2GWh of electricity demand alone. Octopus paid out £5.3 million to its customers, with the top 5% of participants earning an average of £41 each.

Is it worth taking part in DFS events?

Participating in DFS events is definitely worth it, as it requires minimal effort on your part and provides a modest financial benefit.

More importantly, your participation helps stabilise the energy grid. When lots of households join forces to take part, their collective effort significantly reduces peak demand, contributing to a more sustainable and efficient energy system.

When you save electricity during DFS events, you're not just earning rewards, but also making a big impact on the community and environment. 

Tips for reducing your usage during a DFS event

Minor adjustments to your daily routine can go a long way in helping you to reduce your electricity consumption.

Here are some practical tips to help you reduce your usage during a DFS event:

• Run energy-intensive appliances like washing machines, dishwashers, and dryers outside of peak hours.
• Lower your thermostat by a degree or two during the event and use blankets to stay comfortable.
• Disconnect non-essential electronics and chargers that consume standby power.
• Switch to LED bulbs and turn off lights in unoccupied rooms.
• Prepare your meals in advance or use smaller, more energy-efficient appliances like microwaves or slow cookers.
• Take shorter showers and avoid using hot water for tasks like washing dishes.

Summary

The Demand Flexibility Service may not be for everyone, but it's definitely worth considering for those looking for an easy way to save on their electricity bills and reduce their environmental impact.

Getting involved requires minimal effort. Plus, by participating in this programme, you'll be playing your part in creating a more sustainable future for our planet.

The Demand Flexibility Service: FAQs

How do I get paid for not using electricity?

To get paid for not using electricity, you need to sign up for the Demand Flexibility Service (DFS) with a participating energy supplier. Your supplier will notify you ahead of a savings event and you can decide whether to opt in. 

If you successfully lower your consumption during these periods, you'll typically be paid around £3 per kilowatt-hour (kWh) of electricity saved. This helps balance the grid and it also rewards you financially.

Which suppliers offer demand flexibility services?

Several major energy suppliers in the UK offer a variety of rewards and incentives for reducing your electricity usage under the DFS. These include British Gas, EDF, Octopus Energy, and Ovo Energy. 

There are also third-party apps, including options from uSwitch and Equiwatt, that can give you access to DFS incentives if your supplier isn’t signed up to the scheme.