Flexibility seen as major driver of lower power system costs, report says

17 February 2026

Flexibility in how electricity is used and managed could cut up to £125bn from the cost of running the UK power system by 2050, according to new modelling published by an industry-funded research group.

The findings come from the Flex Mix Insights report by Energy Systems Nexus, a collaboration bringing together organisations working on future energy system design. The research was funded by the United Kingdom National Nuclear Laboratory and energy supplier E.ON.

The report examined four possible futures for how flexible the electricity system could become, ranging from limited coordination of energy use to a highly automated system in which appliances, batteries, heat pumps and electric vehicles respond to conditions in real time. It concludes that higher levels of flexibility could reduce the need for expensive infrastructure and help balance the grid more efficiently.

The modelling suggests that greater flexibility could also accelerate the shift to electric heating and transport. In scenarios with the most advanced coordination of energy use, electric technologies could provide around 90% of heat in homes and businesses, compared with just over half in lower-flexibility scenarios.

Electric vehicles are highlighted as a potential source of large-scale energy storage. By aggregating cars into a virtual power plant that releases electricity when demand is high, they could supply several times more energy than other storage technologies, according to the report.

The analysis says achieving this outcome would require market structures and technical standards that allow devices from different manufacturers to work together automatically, along with incentives to encourage consumers to participate. It also calls for digital infrastructure and regulation to support flexible energy services and vehicle-to-grid technologies.

José Davila, director of strategy and sustainability at E.ON UK, says:

“Flexibility is one of the most effective ways to deliver a cleaner energy system while keeping costs down for consumers. This research, which we’ve been involved in through the Energy Systems Nexus, shows that when we use energy more intelligently – shifting demand, making better use of existing assets and avoiding unnecessary infrastructure – the benefits flow through to lower system costs and, ultimately, lower bills. Flex Mix provides valuable evidence to support the case for treating flexibility as a core part of our future energy system.”

The report adds to ongoing debates about how the UK can build a low-cost, low-carbon energy system as electricity demand is expected to rise with the electrification of heating and transport.

The Flex Mix: Insights Report is available to read here.