To add vast new amounts of solar, wind and other variable renewable generation, the electricity system will need to become far more flexible. Customers have a central role in achieving this, by adapting how and when they use electricity. This demand-side flexibility is vital to meeting carbon emissions reduction goals by efficiently integrating additional renewable generation. Flexibility also enables overall savings by aligning electricity use with periods of plentiful, low-cost renewable generation and minimising the grid upgrades needed to accommodate peaks in demand.
Yet not everyone is able to enjoy the additional savings and other benefits that are directly available to individual households for using energy flexibly. Lower-income households, who can benefit most from the potential bill savings, are rarely the first in line for the technologies, offers and services that enable them to shift their energy use.
This report identifies strategies to help lessen inequities by improving access to the benefits of a clean energy system for lower-income and vulnerable households through demand-side flexibility. It builds on the people-centred aspects of the authors’ earlier report The joy of flex: Embracing household demand-side flexibility as a power system resource for Europe.
For flexibility-focused policies and innovations to be genuinely inclusive, they must make the benefits easily accessible for the households that need them most, while protecting against financial hardship, mental stress and physical discomfort.
Policy actions that can help reduce the barriers facing less-affluent households include:
- Targeting the right kind of flexibility — not flexibility that is coerced or doesn’t meet households’ energy and comfort needs.
- Plugging the technology gap by prioritising lower-income households for energy efficiency upgrades and flexibility-enabling technologies.
- Building a bridge to flexibility by designing low-risk and upside-only retail offers.
Europe’s electricity markets are rapidly evolving so that how and when customers use energy will increasingly determine their bills, not just how much they use. Those who can shift their energy demand will reap increasing rewards, while those less able to shift are at risk of being penalised and left behind. These market developments underscore the urgent need for proactive policy action to ensure that all households can comfortably move their energy demand and enjoy the fruits of flexibility.