Lower electricity bills could be on the way if the UK Government meets its target of shifting 2 GW of peak demand by 2030 using AI and digital tech tools.
Science Minister Lord Vallance has put out a plea to businesses and researchers to deploy AI and digital tools to ease evening and weekend pressures on the grid – with an initial £4 million in year one to support projects that can help reduce evening and weekend peak demand.
The aim of the funding is to reduce the grid’s reliance on expensive, polluting gas-fired generation at the busiest times, bolster energy security, and cut costs for consumers. The Government says that a 2 GW reduction is equivalent to the demand of more than 1.5 million homes at peak.
What the UK Government is planning to fund
Dubbed the Clean Energy: 2 GW Peak Time Flexibility challenge, this will be the first of five under the R&D Missions Accelerator Programme, backed by £500 million from the Spending Review.
Year one funding of £4 million kicks off a five-year programme to scale existing solutions, build use cases, and test them – including simulation and modelling – so successful products can reach market more quickly. A consortium including the Energy Systems and Digital Catapults and other research institutions will lead the work with UKRI and DESNZ.
Projects that will receive funding from the programme are expected to strengthen forecasting and shift demand away from peaks. Examples cited include:
- Getting AI to predict how much energy we’ll use days ahead of time, using data from smart meters, weather forecasts and TV viewing patterns.
- Automatically heating or cooling buildings when clean energy is most available, and at its cheapest.
- Using parked electric cars as giant batteries—charging when electricity is cheap and sending power back to the grid when it’s needed.
Officials argue that reducing peak demand in this way could limit the need for new network capacity and peaking plants, helping to lower bills over the longer term.
The project will be led by UKRI in collaboration with DESNZ, which is responsible for the Government’s clean energy mission. Funding will be awarded to a consortium of existing world-leading centres based around the UK including the Energy Systems and Digital Catapults, and other leading research institutions to lead the work.
Lord Vallance, the UK’s Science Minister, commented, “We’re calling on Britain’s brightest minds and innovative businesses to help us cut energy bills, boost energy security, and reduce our reliance on fossil fuels.
“This is a challenge with real impact – if we get it right, we’ll save families money, protect the planet, and make the UK a clean energy superpower.
“R&D has the power to change lives and we want to harness it to deliver real, measurable progress towards the government’s 5 missions and turn bold ideas into real solutions by 2030.”
Kerry McCarthy, Minister for Climate, added, “We are working to build a more flexible electricity system, giving households more choice and control over when and how they use energy.
“This new challenge will help deliver that, exploiting the exciting potential of AI and other cutting-edge tech to help more people access flexible tariffs and save on bills as part of our Plan for Change.”
What reaction has the industry had to the available funding?
Susan Bowen, CEO of Digital Catapult, noted, “Digital Catapult is laser focused on accelerating the practical application of deep tech to boost business performance – an outcome of this work is to decarbonise our key sectors, optimising energy efficiency for businesses and consumers alike.
“Our delivery of this programme underpins the government’s goals to kickstart economic growth, position the UK as a clean energy superpower, and harness digital innovation to deliver smarter, more sustainable energy systems.”
Shubhi Rajnish, Chief Information Officer at the National Energy System Operator (NESO), said,
“With nearly 2 million households already registered to our world-first Demand Flexibility Service – rewarding customers to turn down or shift their energy use during peak hours – we know that smart innovation really can make a difference.
“Harnessing new technology like AI to optimise the way Britain uses its electricity isn’t only going to help make things more affordable for consumers, it’s going to help reduce our reliance on fossil fuels and improve energy security, helping us on our road to clean power by 2030.”
Marzia Zafar, Deputy Director for Energy Systems Management and Security at Ofgem, welcomed the challenge, noting, “Encouraging energy companies and innovators to develop their AI capability and trial new products and services is key to a low carbon future, and at Ofgem we’re hugely supportive of those at the forefront of those efforts.
“I’m really excited to see how the new ideas this funding enables will lead to a more efficient and better functioning energy system for us all.”
Mike Slevin, Director of EMEA Market, Fluke Corporation, focused on data centre in his commentary, “Shifting when we use electricity is a step in the right direction, and it’s great to see the UK tackling demand-side flexibility. But for data centres, some of the biggest and fastest-growing consumers of power, timing only solves part of the problem. These facilities can’t just power down at peak hours.
“If we are serious about building an AI-ready, digital-first economy, we need to think beyond when we use energy and focus on what kind of energy we use. That means designing data centres with local, low-carbon generation from day one.
“Solar, battery storage, and on-site renewables should not be seen as optional extras, but as essential infrastructure. Flexibility matters, but it is resilience and responsibility that will define the future of power-hungry infrastructure.”
