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 22nd 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.

13 Comments

  1. In common with most households I have the benefit of both a mains electricity and gas supply. The vast majority of my energy requirements – space heating, hot water and cooking – are met by gas. My annual electricity bill is under £700, (despite huge recent increases) significantly less than £2 per day. The vast majority of domestic users simply will not be motivated by variable tariff reductions because the potential savings are effectively insignificant. However, on the flip side it is so much easier to work on the penalty equation – i.e. send the electricity price sky high to deter use. What is the euphemism for a “rip off” mechanism?

    Liked by 1 person

  2. Ray Sanders,

    That’s a very good point. Especially if you don’t an own an EV. Most people have a huge energy bill, due to their gas central heating (and, often, cooking), and the massive daily standing charges applicable to both gas and electricity.The main saving of any significance that can be achieved is by using an off-peak tariff to charge an EV overnight, and that option already exists, so won’t be affected by the new plans.

    It does indeed look like a very small carrot; the other side of the equation is probably going to be a very big stick.

    Liked by 3 people

  3. Jo Nova yesterday: “The Great Battery Bungle: Taxpayers Paid Billions for Batteries the Grid Can’t Use”

    Australians were given subsidised batteries, on the theory that the grid would be able to draw from them when supply was tight. However, only 24% of households with batteries have joined the virtual power plant scheme, after subsidies worth billions. They prefer to retain control of the juice they have stocked up with from their solar panels, using it themselves in the evening.

    That perhaps represents the proportion of users who trust the government not to wreck their batteries, or burn their house down.

    Until this scheme becomes compulsory, it must only operate at the margins. Those who sign up for it will be making sure their EV is unplugged as soon as it is charged.

    ASTERISK: the failed virtual power plant scheme may have the benefit of reducing demand on the grid during peak times, since some households are powering themselves.

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  5. “Octopus Energy urges millions of households to use less electricity during solar eclipse

    Firm urges customers to avoid running washing machines and dishwashers between 6pm and 8pm on Wednesday”

    https://www.theguardian.com/business/2026/aug/10/octopus-energy-electricity-solar-eclipse-washing-machines-dishwashers

    …Octopus Energy has urged customers to avoid running washing machines and dishwashers between 6pm and 8pm this Wednesday as the moon is expected to block up to 95% of the sun over parts of Britain.

    The eclipse is expected to knock out the last of Great Britain’s solar power generation for the day, at the same time as the country’s fifth heatwave of the year is likely to increase demand for electricity to run air conditioning, fans and refrigeration systems.

    In return for avoiding unnecessary electricity use during the eclipse, the supplier is offering customers who are signed up to its rewards programme a free hour of electricity to use the next weekend. The offer is open to Octopus customers who are signed up to take part in the supplier’s “saving sessions”, when households can earn rewards for using more electricity at times when renewables are abundant or less electricity when wind and solar power are scarce….

    “Household flexibility is one of Britain’s biggest untapped energy resources,” the supplier said. “Octopus estimates homes could provide a whopping 13 gigawatts of flexible capacity to support the electricity system – particularly through smart appliances, EVs and home batteries – yet only a fraction of this potential is currently being used.”…

    Bang on cue!

    Liked by 2 people

  6. “Millions in Great Britain could face emergency power cuts at short notice

    Exclusive: Grid operator Neso can now respond with rolling blackouts as last resort without need for government powers”

    https://www.theguardian.com/business/2026/aug/10/great-britain-emergency-power-cuts-grid-neso-blackouts

    Millions of households could face power cuts at short notice under new rules to help the electricity system operator avoid widespread blackouts when energy supplies run low.

    The changes, which come into effect this week, will make it easier for the national electricity system operator to call for rotating blackouts at short notice if power supplies are running short.

    It is also marks the first time the system operator can use large-scale power cuts to stabilise the grid without the need for emergency government powers.

    The system operator could call for enough homes and businesses within a designated area to be disconnected to cut each block’s electricity use by more than a fifth with only eight hours’ notice, bringing rolling three-hour blackouts across the country to prevent the risk of total power system collapse.

    The changes to the grid codes – the technical rules covering the country’s transmission system – were quietly approved by the industry regulator late last month. They come only weeks after control room whistleblowers at the National Energy System Operator (Neso) accused senior leaders of trying to cover up the risk of blackouts during the heatwave….

    …The power cuts would form the last line of defence against more severe and uncontrolled consequences of an electricity system collapse, such as those in Spain and Portugal last summer. In a worst-case scenario this could require between five and seven days for electricity to be completely restored.

    The new rules bridge the gap between the system operator’s existing powers to call for short-term power cuts affecting up to a fifth of electricity demand in each area, not used since the miners’ strikes in the 1970s, and the government’s more wide-reaching emergency powers designed for prolonged electricity disruptions.

    In a proposal submitted to the regulator, Neso said the new measures could “be used more flexibly, be initiated quicker” than the government’s emergency code, and it would be designed for “a shorter duration”.

    This could mean blackouts of up to three hours that would rotate across the country, to limit the impact on homes and businesses while the system operator’s control room manages a short-term supply squeeze. Meanwhile, a list of “protected sites” including hospitals, water treatment works and sites of national security interests would be exempt from any planned power cuts….

    Liked by 1 person

  7. Bold mine – “The changes, which come into effect this week” & “The changes to the grid codes – the technical rules covering the country’s transmission system – were quietly approved by the industry regulator late last month” what!!!

    Ohh – “The government’s electricity supply emergency code, which has never been invoked, can only be enacted by the energy secretary. It would initiate rolling blackouts affecting 90% of electricity users to manage a prolonged disruption – such as a large outage at a high-voltage power import cable.”

    Energy security laid bare.

    Almost tempted to order 20 Disposable BBQ Tray with Tongs & Plates – Instant Portable Charcoal Barbecue Grill, Ready-to-Use Single Use BBQ for Camping, Picnics, Beach, Garden & Outdoor Cooking.

    Like

  8. dfhunter,

    That’s why I have a log burner, and hell will freeze over before I have a heat pump or an EV.

    Like

  9. More from Richard Lyon, this time regarding this evening’s eclipse:

    …Octopus Energy, to its credit, saw the marketing opportunity. Its Eclipse Power Down invites its more compliant customers to use less electricity than usual between six and eight this evening, the smart meter keeping score. The reward for going without on Wednesday is one hour of free electricity — on Sunday, in the daytime, when the grid is awash with the stuff and wholesale prices sag towards nothing. An ordinary household draws perhaps a third of a kilowatt-hour in a daytime hour: call it ten pence. To collect more you must cram the ironing, the dishwasher and a boil-wash into your appointed free hour — that is, build yourself a private demand spike to celebrate having flattened a public one. ‘Households can help reduce the need for gas power stations,’ says the company’s Chief Customer Officer, ‘and earn rewards for doing their bit.’ Doing their bit. The last time Britons were paid in coupons and told their small sacrifices were defeating a national emergency, the emergency was the Luftwaffe.

    The word ‘flexibility’ is doing a lot of work in blurring two ideas here. Demand shifting is honourable and old: Economy 7 was paying people to heat bricks overnight fifty years ago, because the nuclear fleet ran regardless and the electricity was genuinely cheap. The wash still happens; you choose when; you end the day having done everything you meant to do. Curtailment is the other thing: the wash does not happen, you consume less, and the payment is for going without. The eclipse hour is dressed as the first. Its arithmetic — a few pennies for the compliant, at a time the system finds convenient — is a rehearsal for the second.

    And the rehearsal has a production schedule. Last week NESO expanded the Demand Flexibility Service nationwide; the week before, DESNZ published draft licences for third parties to manage household heat pumps, car chargers and batteries remotely — applications from March 2027, binding from March 2028. The moon moves on tonight at two kilometres a second. The machinery being built around this evening’s little abstinence is designed to stay.

    Liked by 2 people

  10. Bit O/T – but related to above comment – Pallab Ghosh, BBC Science correspondent has been covering the eclipse from Spain for BBC news. How he got that job & keeps it is beyond me.

    Rant over.

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  11. Dougie – there was a story yesterday on the BBC, one of their new short-form clips (taking a leaf out of tiktok’s book would be the wrong metaphor). I didn’t click on it, but it was a clip of Pallab at the eclipse in Spain, and the story title was apparently a quote by him, reading something along the lines of:

    “This reminds us what it means to be human.”

    Liked by 1 person

  12. Saw this coming. So Installed my solar and PV non grid tied through a separate CU and ring main in the room i use 80% of my power. No device or indeed any of my solar or storage will be connected to the grid – which for most of the year just powers my fridge. Few more panels and another 20kwhr storage – I can easily disconnect from the grid entirely, which I’ll save for when they make smart meters mandatory.

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  13. That rare thing – common sense reporting in the Guardian. However, unlike many Guardian journalists, Nils Pratley is usually fairly thoughtful in his analysis (even if he does still have to pay obeisance to the net zero/renewables long-term (but impossible) dream.

    “Energy nationalism and interconnectors: the next power threat?

    Solar eclipses are far easier to manage than Europe’s cross-border electricity politics”

    https://www.theguardian.com/business/nils-pratley-on-finance/2026/aug/13/energy-nationalism-interconnectors-next-power-

    In the end, the solar eclipse did not cause the electricity grid to flicker. The early drop-off in solar generation was manageable, just as the National Energy System Operator (Neso), the state-owned body responsible for keeping the lights on, predicted. Gas-fired generators still had to be paid nose-bleed prices to fire up, and power via high-voltage interconnectors to continental Europe was also expensively sourced. But the system worked.

    A summer of heatwaves, however, has highlighted European grids’ reliance on those interconnectors – including seven between the UK and the continent – in an age of extreme weather and greater use of intermittent renewables. On Thursday, another low-wind “heat dome” day, a fifth of power to the British grid was coming from the continent at 10am. Cables from France alone were meeting 11%, or 3.54 gigawatts, of demand, or more than twice as much as the output at that time from the UK’s entire fleet of windfarms. [my emphasis].

    The economic appeal of interconnectors is obvious: cross-border transfers should boost security. For Britain, as on Thursday, it can sometimes be cheaper to source from the continent, especially from France’s nuclear-dominated system, than use domestic gas-fired generation. And on sunny windy days when the UK’s renewables are producing a surplus, the flow can be in the other direction. Over the course of a full year, the UK currently imports roughly a tenth of its electricity. [my emphasis].

    The politics, on the other hand, have rarely looked messier. Neso cut off exports to the Netherlands at short notice during the now-famous evening of 23 June; an investigation continues into what, precisely, happened when the British grid was below its operational frequency limits, albeit not its statutory ones, for almost two hours. Meanwhile, the FT revealed last week (£) that Neso ordered wholesale market traders not to export power via four interconnectors in the day-ahead market during several hours in July to ensure Britain had enough electricity.

    “The impact of Neso redispatching interconnectors close to real time can cause trouble, especially for smaller markets like Belgium and the Netherlands,” says Phil Hewitt, a director at the energy market specialist Montel. It is why the contractual setup was altered in May to limit late changes in direction on six links with Belgium, Denmark, France and the Netherlands to no more that 300 megawatts per cable. Peter Atherton, an independent energy analyst, says: “The UK is potentially seen as the weak link in the European system.”…

    …the Norwegian and French links are the critical ones. Cheap power typically flows into Britain via those cables all the time, whereas connections with Belgium, Denmark and the Netherlands are more two-way. “You do have to be careful that you are not overly reliant on interconnectors because it can make you vulnerable,” argues Hewitt. Put another way, Neso cannot control the politics at the other end of the cable….

    …The shorter term, though, is another matter. Energy systems across Europe have become more complex, renewable generation is more decentralised, intraday price swings are more extreme. Balancing supply and demand has become harder.

    Out of that mix, there is potential for energy nationalism to intensify. It is hard to dispute Atherton’s statement of political realities: “It is a fundamental fact of democratic life that no country will export power if it means potential blackouts in its own cities. It would be electoral suicide, whatever contracts you have in place.”

    We’re not there yet. For the time being, pan-European cooperation still looks intact. But the politics of interconnectors have been a theme in many of this summer’s energy stories. Tensions are rising. Solar eclipses are easier.

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