TALKING HEADS/DAN OWEN


Cutting the cost of clean power with energy flexibility


Many UK businesses are likely to face significant cost increases as the country looks to fund the upfront costs of clean energy, but energy flexibility schemes could be one way to minimise the financial impact with minimal disruption – as Dan Owen explains.


F


or many businesses, the clean power transition presents a challenge. While a cleaner electricity system promises long-


term benefits, such as improved energy security and lower carbon emissions, the path to get there will increase costs in the near term. Many of these costs will be down to non-commodity charges. Non-commodity charges cover


the system, policy and network costs required to build and operate the electricity system. As the UK invests in new energy infrastructure, these costs will inevitably rise. For businesses already facing tight


margins, these costs will be a growing concern. Our Business Energy Tracker revealed that 97% of businesses are concerned about the cost impact of the energy transition, and initial data from our Energy Cost Calculator projected an average non-commodity increase of 84.2% by 2030. While businesses have little direct


control over these charges, they are not entirely powerless. Energy flexibility offers a practical way to mitigate their financial impact while also supporting the stability of the electricity system.


Understanding fl exibility In simple terms, energy flexibility means shifting electricity demand or supply from one time period to another to support the energy system. As the UK increases its reliance on renewables, managing the balance between electricity supply and demand becomes more complex. At certain times, the network faces capacity constraints, and flexibility allows energy users to reduce or shift consumption to help relieve that pressure. Businesses that participate in


flexibility schemes can also receive financial rewards. The schemes create a new revenue stream while supporting a stable and resilient electricity system. Flexibility supports two important goals: it helps address nationwide capacity challenges, and it allows businesses to improve the commercial value of their energy use. There is a misconception that


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flexibility allows businesses to avoid non-commodity charges entirely. In reality, it is not that simple. Businesses can influence some


costs by changing how and when they use electricity. For example, reducing demand at certain times can help mitigate some Capacity Market charges. However, flexibility is less about


avoiding costs and more about creating new commercial opportunities. By participating in flexibility services, organisations can generate additional revenue that helps offset the increasing cost burden associated with clean power. For businesses facing rising energy costs, flexibility is key to protecting the bottom line.


Growing opportunity Flexibility is not a new concept, but the market has evolved significantly in recent years. Historically, participation was largely limited to large industrial energy users. Today, organisations of all sizes can participate in flexibility schemes. For mid-market businesses, this


might involve relatively simple measures such as shifting electricity use outside peak hours, which typically fall between 4pm and 7pm. For larger energy users, more


advanced opportunities exist. Businesses can shift demand in response to wholesale electricity price signals or participate in schemes that reward them for adjusting consumption when the system needs support, such as the Balancing Mechanism or Demand Flexibility Service. Businesses that can shift demand by one megawatt or more can unlock more substantial commercial benefits. Even smaller shifts can help relieve capacity constraints, support the electricity system during peak periods and enable businesses to manage their energy more strategically. In many cases, smaller customers


can also combine their flexible capacity. When aggregated together, groups of businesses can have a meaningful impact on the electricity system.


Flexibility is less about avoiding costs and more about creating new commercial opportunities


Hidden assets One reason flexibility remains underused is that many organisations do not realise they already have the assets needed to participate. While batteries and on-site


generation can enhance flexibility, many opportunities already exist within day-to-day operations. Machinery, heating and cooling systems, refrigeration and production processes can all represent sources of flexible demand. The first step is visibility. Many businesses understand their overall electricity consumption but lack detailed insight into how individual assets or processes use energy. Better data visibility helps


organisations identify where they can adjust energy demand without affecting operations. In many cases, small operational changes unlock valuable flexibility. Even organisations that operate


around the clock, such as hospitals, can participate in flexibility services. These facilities cannot simply switch electricity use on and off. However, on-site generation or battery storage allows them to draw power from different sources without interrupting critical services. Cold storage is another example.


These sites can operate thermal batteries. By cooling products to lower temperatures in advance, they can maintain safe storage conditions while temporarily reducing electricity demand during peak periods. As a result, they can participate in flexibility


schemes without affecting product quality or operational performance.


Flexible future Businesses should start their flexibility journey by understanding how they use energy. Improving data visibility and identifying key energy-consuming assets can reveal opportunities to shift demand or optimise processes. From there, organisations can work with their energy partner to identify the most appropriate flexibility schemes for their operations. Flexibility should also form part of


a broader energy strategy. By shifting electricity use to periods when renewable generation is high, businesses can also reduce their Scope 2 emissions. This helps align energy consumption with cleaner power on the grid and supports progress towards net zero targets. Businesses exploring flexibility


today should not see themselves as early adopters. In many ways, they are adopting the approach at the right time. Those who understand their energy use and identify their flexible capacity sooner will be best placed to respond to new opportunities as they emerge, rather than reacting once those opportunities are already in play. As the UK moves towards a cleaner


power system, flexibility will play an increasingly important role in managing costs, supporting stability and enabling the transition. ▄


Dan Owen Future flex lead manager at npower Business Solutions


EIBI | JULY � AUGUST 2026


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