My thanks to Richard Lyon for his latest update, “The Week in Energy — 8 August 2026”. As always, this is well worth a read in its own right, but I want to focus on a couple of developments he mentions. First is the two-day old announcement by NESO, which glories under the euphemistic heading “Demand Flexibility Service expands to open up new opportunities for consumer flexibility”. As is the way of these things, this worrying development, predicated on the need to save the National Grid from its imminent failure to supply enough electricity, is heralded as an opportunity.

The management-speak refers to the Local Constraints Market (LCM) and talks about “providing opportunities for consumers and businesses to be rewarded for increasing their electricity demand when electricity supplies are abundant reducing network constraints and the payments made to generation assets to stop producing electricity”. In plain English, it has been about encouraging electricity consumers to use electricity when they otherwise wouldn’t, and to reward them for doing so. This is because the consumer now has to support the grid rather than the other way around. The only reason this is being pushed is because offering consumers cheaper electricity at times that are inconvenient to them, is less expensive than curtailing surplus generation by making constraints payments.

Compared to the constraints payments that renewable energy companies receive, this is all chickenfeed. We are told:

Significant untapped opportunity still remains. Between April and July 2026, published service requirements represented a potential flexibility opportunity worth £23.3 million, significantly exceeding the volume currently being contracted and highlighting the scope for further market growth.

Yet, as the Renewable Energy Foundation tells us already this year (to 22^nd July, the last time it updated the data) constraints payments of £172,739,633 have been paid out. Those are real numbers, compared to the somewhat speculative “potential flexibility opportunity” offered by an expansion of LCM. Indeed, NESO’s statement contains this blunt admission:

Looking ahead, we forecast constraint costs of £3.2 billion over the next 12 months, with average monthly constraint costs of £335 million expected across autumn 2026.

The sinister aspect to all this is to be found in an almost throwaway sentence:

Since the launch of its enhanced capabilities in April 2026 to enable consumers and businesses to be rewarded for both increasing and reducing their electricity usage…

It’s thus not simply about encouraging consumers to increase their demand at times when they otherwise wouldn’t be using much electricity because the timing isn’t convenient; it’s also about seeking to get consumers to reduce their demand when the grid is struggling to supply the electricity that consumers demand. This Demand Flexibility Service (DFS) isn’t so much a service, as a demand that consumers be flexible despite the marketing euphemism:

DFS has evolved significantly over the last few years and now provides many of the capabilities needed to support a wider range of flexibility requirements. By bringing LCM and DFS together into a single route to market, we can create a clearer framework for providers, unlock greater participation and deliver better value for consumers.

Oh, but you might say, I’m just being cynical. Why not take this at face value? They know what they’re doing, don’t they? Well, the second development stems from a 155 page long document (aren’t they always huge? Anyone would think they don’t want us to read them from beginning to end to discover what’s going on). It’s engagingly called “Smart Secure Electricity Systems (SSES) Programme – Government response to the 2024 consultation on energy smart appliance, licensing and tariff data interoperability proposals to support consumer-led flexibility”. Consumer-led flexibility (CLF) is another euphemism, since the flexibility isn’t something consumers have led the way on; rather it is being foisted on consumers via smart meters, because the increasingly unreliable grid, dependent as it is on renewable energy which isn’t reliable, demands that consumers help it out by being flexible regarding the timing of their demand for electricity. If you’ll pardon the pun, Jaime Jessop spotted the way the wind was blowing back in 2009. In Part 2 of my investigation of the Energy Bill (now the Energy Act) I observed:

It is an attempt to coerce consumers into using energy at sub-optimum times and to use sub-optimum forms of heating (for instance for most UK homes, I remain confident that gas boilers will work more effectively and more cheaply than heat pumps). Putting the word “smart” in front of everything doesn’t make this a “smart” policy. On the contrary, we will only need these restrictions on our way of life because under the “de-carbonisation” plans that the Energy Bill seeks to support, the UK’s energy will become less secure and more unreliable.

Back to the government’s 155 page document. Page 6 includes this little gem:

CLF involves voluntary actions taken by energy consumers – or on their behalf, with consumers’ consent, by Demand Side Response Service Providers (DSRSP s) – to shift some of their electricity use. The consumer is typically rewarded for this flexibility by enjoying lower tariffs or other rewards. The financial benefits of flexibility on offer to consumers reflect the benefits to the wider electricity system (which in turn benefits all consumers by lowering system costs).

The vital words there are “or on their behalf, with consumers’ consent, by Demand Side Response Service Providers (DSRSP s) – to shift some of their electricity use.” The key questions are the nature of the consumers’ consent, and the responsibilities (and identity) of the DSRSPs. Page 8 offers some fine words:

The licence framework will be designed to ensure that consumers are treated fairly, offered simple and consistent complaints and redress processes, and can easily compare service offerings while ensuring they are not unfairly locked into contracts. We intend to include additional protections for vulnerable consumers to ensure they are given the necessary support in their adoption of these technologies. Furthermore, through the licence, organisations will be required to have the necessary cyber security and financial and management arrangements in place, as well to take account of grid stability considerations.

Note that we are talking about “load controllers within the SSES programme licensing scope i.e., load controllers managing domestic scale EV chargers, heat pumps, BESS etc. managing under 300MW of load…”.

Draft regulations have already been worked up – the “The Energy Smart Appliances Regulations 2026” and they’re well worth a look, to see what’s potentially coming down the line. A few key definitions are worth noting:

“flexibility agreement” means an agreement pursuant to which the end-user of a relevant energy smart appliance has agreed that the relevant energy smart appliance will be provided with flexibility services.

“flexibility services” means services involving— (a) increasing or decreasing the rate of electricity flowing through a relevant energy smart appliance, or (b) changing the time at which electricity flows through the relevant energy smart appliance.

“relevant appliance” means any of the following—

(a) a relevant smart battery energy storage system; (b) a relevant charge point; (c) a relevant electrical heating appliance;

“relevant energy smart appliance” means any of the following— (a) a relevant smart battery energy storage system; (b) a relevant smart charge point; (c) a relevant smart electrical heating appliance.

In other words, as those of who weren’t half-asleep or utterly credulous realised long ago, the vastly expensive (perhaps it has by now cost £20 billion) and bureacratic roll-out of smart meters has not been about helping consumers to keep an eye on their electricity usage (most of us already do that unthinkingly). It’s all about control. It was always obvious that a grid that is heavily reliant on unreliable electricity generators (wind and solar) will have massive problems, in the form of over- and under-production, depending on whether it’s blowing a gale on a sunny day in the middle of summer or the depths of a winter dunkelflaute.

For now, the acronym soup (LCM, DFS, CLF, DSRSPs) is being sold as a boon to consumers. Sign up, be prepared to be a little flexible regarding your use of electricity, and you’ll save money. Lucky you! And that may be how it pans out for a while. However, as the grid becomes more and more dependent on renewables, it will in turn become more and more dependent on consumer flexibility. In due course I fear that the grid will cease to exist to support the consumer; rather, the consumer’s job will be to support the grid. A voluntary sysyem with in-built protections may be replaced by a compulsory system with fewer protections.

Perhaps I am being unduly cynical. However, it seems to me that the logical conclusion of the net zero programme, a programme that seeks to electrify everything while making the grid almost wholly dependent on renewables, is a grid that will fail unless consumers are forced to support it. Support, in that context, is a euphemism for energy rationing.

I hope that I am being unduly pessimistic. I hope that common sense will prevail, even if only because politicians are aware that failure in this area is likely to lead to them being unceremoniously booted out of office. I hope that today’s report in the Times (“Labour looks to row back on net zero targets – Rules on electric car sales may be watered down and Miatta Fahnbulleh, the energy secretary, will prioritise lower bills over ‘clean power’”) is the first hint that reality is beginning to bite. Nevertheless, I note that the legislative framework has been prepared, and that rationing (albeit under another consumer-friendly name) is a real possibility. Watch this space.