NESO’s Demand Flexibility Service returns this year – here’s why fleets are the dream participants. By Adam Hall, director of energy services at Drax Electric Vehicles.

Adam Hall, director of energy services at Drax Electric Vehicles

As winter 2024/25 approaches, National Energy System Operator (NESO) has announced the return – and expansion – of its Demand Flexibility Service (DFS), presenting fleets with a golden opportunity to profit from smarter energy use.

EV fleet operators can leverage predictable schedules to optimise charging during off-peak periods, cutting costs. In demand-side response (DSR) markets such as DFS, fleets can also earn revenue by adjusting energy use in line with National Grid signals.

The challenge of balancing supply and demand

For the UK energy grid to run smoothly, electricity supply and demand must match in real time. Any imbalance can lead to blackouts or damage to infrastructure. The grid operates at 50Hz, and manufacturers design electrical appliances and assets accordingly. If NESO can’t keep the system in balance, the frequency changes (even a fluctuation as small as 0.2% can cause disruptions) and appliances and assets won’t work.

This challenge is increasing with the growing use of renewable energy, which often depends on favourable weather conditions. However, demand-side response (DSR) solutions will be the future of balancing supply and demand by optimising the use of electric assets.

Businesses can participate in DSR markets by reducing their electricity consumption when demand is high or increasing it when supply outweighs demand. DSR markets not only allow businesses to help the grid operate reliably, they also enable them to generate revenue and reduce electricity costs across the supply chain.

The Demand Flexibility Service (DFS)

The DFS rewards electricity consumers for helping NESO balance electricity supply and demand by reducing their consumption at peak times. By turning your electric assets down or off at peak times, you can help reduce the risk of blackouts and generate revenue for your organisation – without disrupting operations.

Last winter – 2023/24 – there were over 2.6 million DFS participants, and they saved over 3,700MWh. During that DFS period, our customers earned the highest dividends of any Industrial and Commercial (I&C)-only provider, with nearly £1.2m in combined revenue. By balancing supply and demand, they helped the grid ‘keep the lights on’ and received real financial benefits through smart energy management.

Why electric fleets are the ideal candidate for the DFS

EV fleet operators hold a powerful position because fleet vehicles usually operate on a predictable schedule. Many fleet vehicles only operate during the day and park overnight. Others may need to charge during the working day to deliver against operational requirements. For these vehicles, adjusting charging schedules to primarily off-peak periods will enable fleet managers to generate savings. By adjusting charging schedules to off-peak periods, your organisation can benefit from lower energy costs.

Within DSR markets, such as DFS, fleets can generate revenue, too, by reducing their energy use in response to National Grid signals.

If you’re keen to use your fleet to reap the benefits of DFS (and other DSR markets), you don’t have to go it alone. A partner such as Drax will look to understand your operational requirements and business position before proposing cost-saving solutions. By aligning this knowledge with market insights, they can design a charging strategy that encompasses charging profiles for individual charge points.

In 2023, we worked with commercial property owner FI Real Estate Management (FIREM) to reduce its collective power demand, including optimising the charging schedule of its on-site EV charge points. The flexibility we created helped the grid balance supply and demand, boosting Britain’s energy security while contributing to FIREM’s own net zero goals.

John Corker, advisor to the managing director and chief operating Officer at FIREM, said: “We are constantly reviewing how we can reduce the environmental impact of our real estate portfolio, so we jumped at the opportunity to support this important UK initiative and look forward to increasing our participation in the scheme as future opportunities arise.”

ElectriFlex with Drax

ElectriFlex combines technical expertise with DFS and other market access, helping you unlock the full benefits of DSR. ElectriFlex is a simple and commitment-free service that operates year-round. You can explore relevant demand flexibility opportunities and opt in or out of each request.

ElectriFlex incorporates DFS and doesn’t penalise financially if you commit to flexing but can’t deliver. For businesses keen to generate revenue from DSR – or those just interested to see whether flexibility works for them – ElectriFlex offers a risk-free way to explore the financial opportunities of optimisation.

Future opportunities for fleets to flex

Experts expect NESO to request more demand turn-up in the future, allowing fleets to take advantage of surplus electricity. This will create further opportunities for fleet managers to access cheaper, or even negatively priced, energy during periods of oversupply.

Participating in DSR isn’t just about generating revenue by optimising energy consumption. It’s also about ensuring your assets – such as your vehicles fleets – support the UK energy system.

Fleet managers who embrace these opportunities can play a crucial role in grid stability, all while boosting their business’s bottom line.

For a complete guide to DSR opportunities, click here.