Flexibility

Flexibility is crucial to operating the whole energy system where the supply and demand of energy needs to be balanced over different timescales.

Flex schematic

A full, detailed version of this section can be found in the 2021 FES document:

FES 2021 interactive document

FES 2021 print ready document

 

Key insights

Electricity system flexibility

In future the electricity system will be supply-led. Demand will adjust to use or store energy from variable renewable generation. Solutions will include electrolysis, interconnection, demand-side response and storage, particularly in the two to four hour range.

As electrification of the economy increases across all scenarios, flexibility becomes increasingly important to help manage peak electricity demands and reduce the need for additional electricity generation capacity.

Appropriate price signals and incentives will be needed from the energy market and from policy to encourage the types of flexible demand-side response behaviour that a net zero world requires from consumers.

Whole energy system flexibility

The flexibility provided today by the gas transmission system will significantly reduce in Leading the Way and Consumer Transformation in 2050. These scenarios will need significantly more flexibility from consumers. 

Large-scale interseasonal energy storage is essential to meeting net zero, our net zero scenarios use hydrogen to meet this need. No sites currently exist, so the right policy and economic incentives for investment need to happen to bring this forward.

 

Where are we now?

Electricity system flexibility

Electricity system flexibility today is predominantly delivered on the supply side. As demand varies through the day, different sources of electricity are brought online. Some like nuclear operate more as ‘baseload’ generation, running constantly, other than for periods of maintenance, while others such as natural gas turbines are more flexible. 

Gas system flexibility

The gas system delivers most of today’s flexibility through the ability to vary upstream gas production, connected storage sites and linepack (the amount of gas in the network at any given time). Storage capacity for gas is substantially higher than for electricity. At the end of 2020 there was approximately 15,000 GWh of gas in storage, and a minimum 3,800 GWh of linepack in the gas network; there is less than 30 GWh of electricity storage capacity, of which 96% is from pumped hydro storage sites, with around 4% from other forms like batteries.

Scenario overviews – electricity system flexibility

Electricity supply and demand flexibility in 2050 

Flex scenario overviews

Consumer Transformation

The road to 2050

  • Peak electricity demands start to increase from the mid-2020s as different sectors of the economy electrify.

  • Through the 2020s, developments in flexibility are gradual; on the supply side it is made up primarily of growth in interconnection and storage and there is limited growth in demand side response outside of the industrial sector.

  • In the 2030s demand side response and consumer engagement starts to increase, helping mitigate demand growth.

  • Natural gas generation is phased out with other forms of dispatchable generation filling the gap.

  • Hydrogen storage starts to play a role, growing to 12 TWh by 2050 amidst growth in electrolysis and hydrogen generation capacity, while natural gas demands fall sharply.

  • By the 2040s smart automation has become the norm, with demand side response and vehicle to grid technology (V2G) helping reduce peak demands by over 45 GW in 2040.

What does 2050 look like?

Demand-side flexibility dominates over supply-side flexibility and is the single largest source of flexibility on the electricity system. A combination of electrolysis, hydrogen generation and storage offer high levels of whole energy system flexibility and high net exports over interconnectors help manage renewable generation output.  

System Transformation

The road to 2050

  • Peak electricity demands increase more rapidly post-2025 led by electrification of transport.

  • Contribution from demand-side response to mitigate these is limited, with the largest contributions from the transport sector post-2035, reaching over 22 GW from smart charging and V2G by 2040. 

  • Hydrogen storage is developed at scale from the early 2030s, reaching over 20 TWh by 2040; the gas network is repurposed to transport hydrogen.

  • Post 2035 sees the growth of hydrogen and gas CCUS generation, offsetting the decrease in unabated gas generation on the supply side.

  • Interconnection capacity reaches 15 GW by 2030 and just under 20 GW by 2040.

What does 2050 look like? 

Total supply-side flexibility is similar to demand-side flexibility. Widespread use of hydrogen keeps peak electricity demands lower, although lower consumer engagement limits the contribution of demand-side response. Dispatchable thermal generation from gas CCUS and hydrogen support security of supply. High net exports over interconnectors help manage renewable generation output. Hydrogen use across the economy is supported by high levels of hydrogen storage to move energy interseasonally.  

Leading the Way

The road to 2050

  • Peak electricity demands fall in the short term, but start to increase rapidly post-2025 as the economy electrifies.

  • Rapid early take-up of demand-side response and V2G sees a reduction in peak demand of 20 GW by 2030 and 55 GW by 2040.

  • 2 TWh of hydrogen storage is needed by 2035 amidst growth in electrolysis and hydrogen generation, while natural gas demands fall sharply.

  • Unabated natural gas generation capacity declines sharply from 2025, in line with the CCC target of no unabated gas generation by 2035. This is mitigated by growth in interconnection, storage and hydrogen generation and additional demand reduction from demand side response technologies.

  • Interconnection capacity increases rapidly, reaching 13 GW by 2025 and 21 GW by 2030, and net exports are seen over the interconnectors between 2026 and 2050.

What does 2050 look like?

Demand-side flexibility dominates over supply-side flexibility. High levels of energy efficiency and greater consumer engagement limit peak demands through demand-side response and V2G output. Electrolysis, hydrogen generation and hydrogen storage combine to offer high levels of whole energy system flexibility, with the high levels of electrolysis and load shifting able to maximise the use of local renewable generation, with no net import or export across the interconnectors.

Steady Progression

The road to 2050

  • Peak electricity demands increase steadily through the 2020s and more rapidly post-2030.

  • Demand-side response take-up is low as is consumer engagement, reaching only 9 GW by 2030 and 13 GW by 2040, with very minimal engagement in V2G.

  • A limited role for hydrogen across the economy sees only slow growth in electrolysis and no large-scale storage.

  • Natural gas continues to play a significant role backing up renewable generation and meeting security of supply, with some displaced by gas CCUS post-2035.

  • Growth in interconnection capacity is slow but still reaches 15 GW by 2030 before plateauing.

What does 2050 look like?

Supply-side flexibility continues to dominate over demand-side flexibility. Peak electricity demands are capped by limited electrification of the heat sector; relatively low levels of consumer engagement in demand side response means this only has limited impact. The natural gas network and storage continue to provide energy flexibility, meeting heat demands and supplying gas generation (with and without CCUS) which helps to meet security of supply. Levels of electrolysis and hydrogen usage are low.

Scenario overviews – whole system flexibility

Peak demands

We expect peak demands to increase in all scenarios as electrification of other sectors of the economy continues and expect the nature and timings of peak demand to change as the country decarbonises and the share of renewable electricity supply increases. For example, in Leading the Way a typical daytime demand could be boosted by up to 58 GW of electrolysis and 19 GW of electric vehicle charging. This could be encouraged to happen at times of high renewable output by low market prices or other incentives and would be in addition to ‘ordinary’ demands on the electricity system. Consumer Transformation is the most electrified scenario and sees the peak demands for electricity increase rapidly from the late 2020s, reaching 113 GW in 2050. 

As the heat sector decarbonises in the net zero scenarios, with greater use of heat pumps and hydrogen boilers, the peak demand for natural gas will reduce. In Steady Progression, natural gas peak demands continue at a similar level to today, In Consumer Transformation and Leading the Way, natural gas peak demand declines to nearly zero as unabated gas is phased out completely, with only limited residual uses in the energy system. In System Transformation natural gas is still used to produce hydrogen via methane reformation with CCUS. However, the peak demand is lower than today as methane reformation to produce hydrogen takes place throughout the year. 

Digitalisation

Digitalisation is essential to managing an energy system with smart flexible demand. Without careful control of assets, demand-side technologies responding directly to half hourly price signals could cause big fluctuations in frequency. More granular control including randomisation of response times will be needed to avoid causing system operation issues nationally, regionally and right down to street level. For example, a whole street of electric vehicles all drawing power from or feeding power back to the grid at maximum output could cause local network issues. The right incentives need to be in place to manage this, with the ESO working closely with Distribution System Operators to ensure a coordinated response. Our 2020/21 Bridging the Gap programme explored how data and digitalisation, technology and markets can help meet the new challenges of a decarbonised electricity system.

Markets

We see up to 43 GW of electricity storage across our scenarios in 2050, compared to 3.5 GW today, 44 GW of demand-side response, compared to 6 GW today and 58 GW of electrolysis from close to zero today. These high levels, and related flexibility, need to be incentivised and supported by appropriate market signals. In future, investment signals should come from the wholesale market to support balancing of energy flows rather than ancillary services as they are today. We must also identify the optimal market signals to unlock flexibility, ensuring they complement other markets such as adequacy (capacity market) and decarbonisation (carbon pricing). Our scenarios support the work we are doing on market change, and feed into our market strategy which looks ahead to develop a clear 10-year vision.

Whole energy system flexibility

The type of flexibility natural gas provides will continue to be important to the future energy system and as its use diminishes, alternative solutions will be needed in the net zero scenarios. Urgent focus is needed to get the right infrastructure in place to deliver zero-carbon energy. In the net zero scenarios in 2050, whole energy system flexibility is provided primarily by using electricity or gas to produce hydrogen, storing this hydrogen and then using this hydrogen in power stations or to meet end user demand. Producing hydrogen through electrolysis offers demand-side flexibility and burning it in turbines offers supply-side flexibility to the electricity system. Though the overall ‘round cycle’ efficiency of this process is low, it allows energy generated in windy periods to be used in calm periods, or to be stored between summer and winter. It will therefore be important to support security of energy supply and a strategic approach to the development of hydrogen storage is required to kick-start investment given the likely lead times involved. ​

Despite a huge increase in electricity storage capacity in the net zero scenarios, the energy it stores is dwarfed by that of hydrogen storage. In 2050 the capacity of electricity storage (excluding V2G) in each scenario represents 1.1%, 1.3% and 0.2% of the hydrogen storage capacities in Leading the Way, Consumer Transformation and System Transformation respectively (15 TWh, 12 TWh and 51 TWh). In Steady Progression we assume that natural gas will play a similar role to today in terms of whole energy system flexibility.

Demand flexibility

The Industrial and Commercial sectors are expected to offer increasing opportunity for demand-side response (DSR: the turning up or down, or off or on, of electricity consumption in response to external signals) across all scenarios. Domestic consumers will be able to provide demand-side flexibility through smart appliances, smart storage heaters and EVs charging on smart tariffs and vehicle-to-grid (V2G) technology. Much of this flexibility will be delivered without direct consumer involvement – but could happen in the background once they have opted in. 

Across all scenarios, electrification of transport raises challenges about how electric vehicles will be charged but also creates an opportunity to increase flexibility. Charging at home and increasing daytime or overnight demand through smart charging could be as valuable to the energy system as reducing peak demands – in fact, we expect smart charging to keep additional peak demand from EVs to between 7 and 16 GW. In Consumer Transformation and Leading the Way, high levels of consumer engagement see net EV demands at peak times become negative from the mid-2030s, with more power being fed back to the grid from electric vehicles than is used to charge them.

Electrolysis plays an important role as a source of flexibility in the net zero scenarios, able to ramp up demand rapidly to match renewable output and producing hydrogen that can be stored until it is needed. In Consumer Transformation and System Transformation some electrolysis capacity developed in the 2030s is connected directly to new nuclear generation, allowing these generators to operate in baseload. At times of low demand, nuclear-connected electrolysis increases to absorb excess power from the reactor. High levels of renewable generation, particularly offshore wind, are needed in this year’s net zero scenarios to meet annual electricity demands. This is a key part of the transformation of our electricity system from being demand-led to being supply-led, with demands shifting to make use of available electricity.

Interconnector flows

 Interconnector net annual flows 

 Flex interconnector flows

 

Today there are net imports over our interconnectors with continental Europe throughout the year - particularly at peak times. We expect these imports to increase in all scenarios through the 2020s as interconnector capacity grows. When there is excess renewable generation in GB, more than 25 GW of interconnection to other electricity markets can be used to import or export excess power in Consumer Transformation and Leading the Way. From the late 2020s Consumer Transformation and System Transformation see an increasing net export of electricity over the year; the high levels of variable renewable generation, particularly offshore wind, in these scenarios often exceed demand and so power is exported to the continent. Higher levels of electrolysis and demand side response in Leading the Way reduce the need to export power, although interconnectors still play an important role trading electricity throughout the year.