DESNZ, Ofgem and NESO recently published the Clean Flexibility Roadmap, setting out their vision for how we can achieve a smarter, cleaner energy system.

We’re glad to see the Roadmap include some detail on the benefits of flexibility for consumers. As this is something we’ve been working on, we thought we’d take a closer look at how the Roadmap aligns with our analysis, and its implications for how we deliver flexibility fairly.

Smart tariffs offer big savings for households with high-demand technologies

The Roadmap highlighted that EV drivers could save around £330 a year by charging overnight, while heat pump users could cut bills by ~£250 annually through tariff switching and flexible operation. Analysis we presented at our latest smart energy market review webinar broadly aligned with these figures. In fact, we found potentially even higher returns for these households using type-of-use tariffs.

Some households can save just by switching

In the Roadmap, most of the savings for heat pump households were achieved through switching tariff alone, with only modest extra savings from shifting usage patterns. This reflects our modelling, which predicted a £200 saving on a heat pump time-of-use tariff, with no assumed shifting. This suggests that, for some households, switching to smart is a “no-brainer” – whether or not they actively change how they use electricity.

Households without major assets find it more difficult to save

Interestingly, the Roadmap predicted that consumers without tech like EV or heat pumps could still save over £200 by switching to a dynamic time-of-use tariff. But most people won’t benefit without also changing their routines – and shifting electricity usage can be difficult. Shifting requires a range of different capabilities: digital skills to track live price changes, enough overall electricity demand to make real savings, or automated appliances to respond quickly. For many households, the complexity involved may outweigh the potential savings.

Those seeing substantial savings remain in the minority

Despite the high savings potential for some groups, only a minority of households are currently able to benefit from smart tariffs. Just ~3% of households own an EV, and the ~230,000 heat pumps installed remain concentrated among wealthier consumers due to high upfront costs. And only a fraction of other households combine the right routines and technical capabilities to take full advantage of advanced products.

What’s needed next?

Our analysis shows that the benefits of energy flexibility are currently very unequal. Whilst some households stand to gain a lot, the majority don’t. This has important implications for planning for Clean Power 2030.

We need to ensure that system benefits are spread equally. There is a gap between those that can benefit from flex and those who are excluded. Making sure everyone can benefit from optional flexibility requires clarity from decision-makers and needs reinforcing with policy.

We need to know more about who is benefitting from flexibility. Increased data transparency will ensure that the system costs saved by flexibility are truly passed on to consumers. We also need better information from suppliers on who is currently engaged in flexibility, as well as further modelling of benefits across different types of consumers.

We need to plug the gap between consumers and flexibility. People who can already benefit from smart energy offers need to be made aware and supported with making the switch. Projects like CSE’s Smart Energy Action Plans (SMEAPs) are already working towards this goal, but significant expansion will be necessary. Those for whom flexibility isn’t currently an option can be helped with retrofit, upskilling and advice. But in the longer term, we need to see more market options suitable for different consumer groups.

Explore more on this topic

• Find out about our Smart & Fair programme.
• Explore more insights from our smart energy market review webinars.