UK Demand Response Cuts Peak Load, Costs £2,325/MWh

Researchers at the National Bureau of Economic Research analyzed the UK’s first nationwide demand flexibility program, which incentivized customers to reduce energy use during peak demand events in the winter of 2023 to 24. The program involved nearly 2.7 million customers, with a randomized control group of roughly 120,000.

Those who participated lowered their energy demand by 23.1% during peak events. However, the program cost the system operator an average of £2,325 per megawatt-hour of reduced demand.

The study also found that households with solar panels, batteries, heat pumps, and electric vehicles were more likely to participate in the demand response program, suggesting these technologies can amplify flexibility. The researchers note this analysis focused on a single winter and further research is needed to assess long-term impacts and cost-effectiveness. Understanding the true cost of demand response is crucial as energy systems increasingly rely on flexible load to integrate renewable energy sources and maintain grid stability.