The rise of decentralised energy, increased deployment of renewable generation on the grid and changing energy usage behaviours are creating a challenge for the System Operator and renewable generators in keeping a balanced grid.

Industrial energy users and renewable generators across the country are working with the System Operator to address these new challenges by being flexible with their energy. Intensive users do this by ramping up or decreasing their demand on the grid when it is most needed, in response to a signal or incentive.

This flexibility is the key component of demand response. Users can provide flexibility in many ways, including by changing their usage behaviours, using on site efficient generation and/or through battery storage technology.

The ability to provide this flexibility is a win-win for everyone involved.

A more flexible power system creates a stable power grid, which can then accommodate more renewable energy to meet our decarbonisation targets at least cost. The industrial energy users providing flexibility also benefit with lower energy bills and increased competitiveness when operating in a decarbonising global economy. In the longer-term, savings from avoided network upgrades, fewer standby power stations and more renewable generation output could be passed on to all energy users. As the transformation of the energy system gathers pace, the ability of industrial energy users to provide this flexibility will become even more important, as it is industry which is best placed to provide the flexibility needed.

The collaborative report sets out a new model of industrial energy use in which companies are able to boost the competitiveness of industry and help UK achieve its decarbonisation targets through active participation in the energy market.  It sets out the current state and potential for industrial and business energy users who provide demand flexibility to the grid, and highlights what more could be done to achieve the market's full potential.