The UK could reduce energy system costs by at least £70 billion by 2050 if it combines high deployment of renewables and nuclear energy with low-carbon flexibility.
A new report by the Energy Systems Catapult examined the technologies and services that shift, store and release energy to smooth peaks in demand. It found that there was huge potential to get more out of our existing grid, and avoid some of the costly upgrades that could come from a fully reinforced grid.
In its Innovating to Net Zero 2026 report, the Energy Systems Catapult modelled four future scenarios for how supply and demand could evolve as transport and heating electrify. In all scenarios, electricity consumption was projected to rise sharply, with demand potentially increasing by up to 80% by 2040. The model also flagged the growing impact of digital infrastructure, estimating data centres could require an additional 28 TWh in 2040, representing around 5% of overall demand.
One key element the model discovered, however, was the cost-effectiveness of pairing rapid renewable deployment with flexibility, rather than trying to build out the system using higher-cost alternatives. It suggested taking the flexibility route could deliver at least £70 billion of savings by 2050 versus the most expensive scenario.
Guy Newey, CEO of Energy Systems Catapult, noted, “Embracing flexibility could help the UK save billions in infrastructure costs – while giving homegrown innovators a platform to scale up and compete globally.”
Why EV flexibility is doing the heavy lifting
Of the flexibility options assessed, electric vehicles stood out as particularly valuable. Smart charging has significant potential to balance the grid by shifting charging to periods when power is cheaper and cleaner, while vehicle-to-grid (V2G) could go further – but both need better integration with the wider system and propositions that work for consumers in the real world.
Jon Saltmarsh, CTO at Energy Systems Catapult, added, “Our approach to balancing supply and demand needs to shift from centralised command of electricity generation to orchestrating flexibility from distributed, smart energy assets, such as EV chargers, static batteries and electric heating. This requires a shift in both mindset and approach and it provides fantastic opportunities for innovation.
“We’ve identified five peak gaps in supply and demand that we need to bridge using innovative flexibility technologies. Four of these gaps relate to electricity while a fifth – the Peak Heat Gap – may present the toughest system challenge of the energy transition, and the greatest opportunity for innovation.”
Buildings could provide additional flexibility
While EVs were seen as being one of the biggest sources of flexibility, the Energy Systems Catapult also noted the potential of buildings across the UK to feed into the grid. It noted that residential properties could provide up to 76 GW of electricity flexibility by 2040, while the commercial sector could offer 8 GW of flexibility by 2040, with building management systems seen as a key enabler.
The report also suggested that heat networks combined with thermal storage technologies could provide 300 GWh of flexibility by 2040. It’s long been established that data centres could be the biggest contributors to a heat network, which could help offset their larger impact on the electricity grid.
