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Household engagement with the Demand Flexibility Service

A young boy and his parents looking and pointing at a smart energy meter.

Research for National Grid ESO evaluating consumer experiences of the Demand Flexibility Service.

Our future net zero energy system will require people to change how and when they use energy. Smart and flexible energy services will help us to achieve these changes, but they bring new potential ways to create unfairness. To ensure that no one is excluded from using flexibility services, it’s important to understand both the benefits and the challenges of participation. Through our Smart & Fair programme, CSE is playing a leading role in understanding consumer experiences and ensuring a just energy transition.  

In winter 2022, National Grid ESO introduced the Demand Flexibility Service, which rewarded customers for changing the times when they used the most energy. In this report commissioned by the ESO, CSE investigated consumer experiences of the DFS.

We found that for most people, the experience of participating in the DFS had been positive. But to be more inclusive, future versions of the service will need improved communication, transparency and more options for flexible products and services that reflect the varied needs of the population. It is also vital that safety mechanisms are built in so that more people can participate safely and experience the benefits of the service. 

Investigating consumer experiences of the DFS

CSE led the evaluation of consumer experiences of the DFS. We wanted to answer the following questions:

To answer these questions, we considered data from a variety of sources. We asked people participating in the DFS to keep diaries of their experiences. We took an opinion poll from a representative sample of the UK population and collected over 23,000 responses to an online evaluation survey shared by domestic DFS providers with their customers. Semi-structured interviews were also conducted with survey respondents. 

We used our Smart & Fair capabilities lens to look at the difference between people’s ability to participate in the DFS and whether they benefited from changing when they used energy. 

Consumer experiences of the DFS were mostly positive

Barriers to participation in the DFS were low – 1.6 million households and businesses took part. Our research showed that most people had a positive experience using the service. More than three out of every five people (62%) – said they were satisfied with their experience. More than 80% – that’s four out of five people – said they would take part in the service again.

Money was a motivator, but financial rewards were small

Our findings about motivation and rewards were complex. Most people said that they were motivated to participate by the potential to save money on their energy bills. The savings from participation turned out to be small, but many people still reported being happy with their experience. Some people discussed other benefits like experiencing a ‘feel-good-factor’ from taking part and learning about energy. 

Diverse households had a different experience

We found that people living with health conditions, those with financial stress, and smaller- or larger-than-average households had less positive experiences. They were less able to participate in the DFS and receive the benefits. 

Our recommendations for future flexibility services

Our research has revealed that the DFS has the potential to exclude certain types of households. We are providing recommendations for how future versions of the DFS, can contribute to long-term change in the energy system in a way that is fair and inclusive. These include:

A new DFS for winter 2023-24 has been launched, and the ESO has made recommendations to service providers based on our research findings and recommendations.

Claire Dykta, head of markets at National Grid ESO commented on the importance of this research to future versions of the DFS:

This independent research is an important tool for the ESO and industry partners as we look ahead to this coming winter’s scheme and beyond. Alongside the formal consultation process and wide-ranging engagement already underway, this analysis will support us in leveraging the success and lessons learned of last year’s scheme.

Claire Dykta, National Grid ESO

As our energy system transitions to net zero, we will rely more and more on flexible energy services like the DFS. CSE’s research promotes fairness in this transition, by making sure everyone can participate in, and benefit from, changes to our energy system.

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