Why grid flexibility is one of the most cost-effective policies you’ve not met yet

For more than a decade, the UK’s energy debate has revolved around the big, visible parts of the system: offshore wind, nuclear, market reform, and – increasingly – how we pay for the transition.

These remain essential. But as the energy system changes, there is growing recognition that how we invest matters just as much as how much.

While these questions dominate front pages, a quieter, cheaper and faster solution has been emerging in the background: local flexibility, delivered through smart technologies already being trialled in homes around the country.

The truth is simple. To create a cleaner energy system in the most affordable way, we need more than new power plant and new cables to transport the power where it’s needed. We need a smarter, more agile grid that can make better use of what we already have.

As electricity demand rises – driven by electric vehicles, low‑carbon heating and new commercial uses – power networks face increasing uncertainty over where that demand will fall, and when it will be needed. Meeting those needs efficiently requires a smarter, more flexible approach that complements traditional infrastructure investment.

This is where targeted flexibility comes in.

Rather than just building more, or ever‑bigger, infrastructure to meet spikes in demand – like when we all cook dinner in the evening or charge electric cars after finishing work – we can call on local assets such as neighbourhood‑level batteries to help smooth those peaks. When a few well‑placed kilowatts of storage can avoid or delay millions of pounds of reinforcement, the savings flow can directly back to customers through lower future bills.

It’s an essential part of every modernised energy system. But in Britain, its full potential remains untapped.

So instead of relying on forecasts and building new infrastructure everywhere demand might appear, flexibility provides additional tools to manage uncertainty. In some cases, it can reduce or remove the need for physical upgrades. In others, it helps ensure that major investments happen at the right scale, in the right places, at the right time.

Because flexibility allows the system to use electricity differently, shifting demand or supply to the times and places the grid needs it most. When used in the right locations, flexibility can unlock capacity more quickly and at lower cost, while helping Distribution Network Operators (DNOs) make better‑timed, better‑informed investment decisions.

This is not about avoiding investment, it is about optimising it, to protect consumers from unnecessary costs.

Growing pressure on local electricity networks

By 2035, more than 1,400 local substations are expected to need upgrades to meet demand. Reinforcement is essential, but it is also expensive. These costs appear on every electricity bill under the bracket of “network charges”, and that is a line on the bill that has quietly risen for years.

Some forecasts suggest even if wholesale electricity prices fell to zero by 2030, bills could still be similar to today’s because ‘non‑energy’ costs now make up a large share. These include network charges, policy costs, and payments to reduce renewable generation when the network is constrained.

That makes it essential to use every available tool to deliver capacity in the most cost‑effective way possible.

Flexibility: the lowest‑cost tool we already have

Our own modelling shows that using domestic batteries in a targeted way, installed in areas facing local grid constraints, can unlock firm, predictable flexibility exactly where it is most valuable.

These batteries provide DNOs with local capacity they can rely on, giving them more flexibility over the timing and scale of reinforcement works while delivering immediate benefits to the households that host them.

For those households, especially in social housing, the model provides guaranteed bill credits and lower electricity costs, without requiring behaviour change or upfront investment. For the wider system, it helps networks manage rising demand more efficiently and at lower overall cost.

This approach supports fairness too. A system that only builds its way out of constraints passes cost directly to households. One that uses flexibility first reduces that burden.

The results are compelling. Early modelling suggests that providing batteries to people living in social housing in these grid-constrained areas could meet 77% of the UK’s projected local headroom gap (headroom gap is the amount by which peak power demand exceeds capacity at a substation – and is usually solved by building new substation and other infrastructure in the local area) by 2035, rising to 99% if expanded to all housing types.

For those households, bill savings of about £220 a year are possible. At a national level, up to £3.3 billion in cumulative system savings – money that would have otherwise needed to be spent on new power lines and substations – could be unlocked by 2030, alongside lower system‑balancing costs.

Flexibility, in other words, is no longer a theoretical tool for tomorrow. It is a real‑world solution that protects consumers today.

You can download our full report on the role batteries can play in supporting networks and driving more affordable energy here