Solar panels on suburban roofs. Photo by Louis Reed on Unsplash

How fair is flexibility?

01 July, 2019

Michael Fell

Reading time: 7 minutes

Researcher Michael Fell draws on his recent paper to consider the fairness implications of the move towards an energy system which increasingly values the ability to be flexible.

In this blog, CREDS researcher Michael Fell draws on his recent Energy Research & Social Science paper with Gareth Powells to consider the fairness implications of the move towards an energy system which increasingly values the ability to be flexible.

Flexibility capital

Being flexible can feel a lot like being free: doing what we want, when we want. We increasingly seek or have it in our working lives, when we do our shopping or order food. An ability to be flexible can bring rewards in many ways – such as avoiding rush-hour traffic, attending ad hoc networking events after work, or (for some) using cheaper electricity during off-peak times.

Not everyone has the same ability to flexible. If you have a job with strict working hours, it may be impossible to avoid the rush hour. People with caring responsibilities may be unable to change plans to attend out of hours events. And (some!) people who live in flats with thin walls may feel bad running their washing machine on cheap power later in the evening.

This ability isn’t something we can generally pick up or lose by simple choice. A whole range of hard-or-impossible-to-change factors related to our living arrangements, work, religion, ownership of different technologies, and many more, all add up to determine how flexible we can be.

This might not be a problem in and of itself – and indeed, flexibility is a highly nuanced concept. If, however, our energy systems become increasingly reliant upon flexibility of end users to operate effectively (e.g. to integrate more variable and distributed energy resources), there could be important implications for the users of that system – that is, us.

In my CREDS research, which at the moment is focusing on the social impacts of peer-to-peer energy trading (where people could buy/sell solar generation with neighbours), households’ ‘flexibility capital’ – their ability to be flexible, and in this case to potentially capitalise on cheaper prices – is a prominent consideration. This is, of course, also the case for projects in the CREDS flexibility theme.

Flexibility and fairness

In our new paper Flexibility capital and flexibility justice in smart energy systems, (free preprint here) we discuss how the systematic interaction of flexibility capital with other dimensions of difference in society could present both opportunities for benefit, but also causes for concern. We illustrate this in the paper through the example of financial resources, or affluence. We think this can interact with flexibility capital in a couple of important ways.

Firstly, generally speaking, we suggest more affluent households are more likely have flexibility capital as a result of technological means. That is, they are more likely (now and in the future) to possess the electric vehicles, smart appliances, home batteries, solar panels and so on that that allow you to change you electricity consumption patterns without impacting too much on your lifestyle. They could, for example, store electricity in a battery when it is cheap and use it later, with little impact on their activities.

Those with less disposable income, however, are less likely to have access to such technology. If they have flexibility capital, it is more likely to come from the ability to change when they do activities, such as by doing washing in the day rather than the evening. The source of their flexibility capital is more social, and less technical.

Of course this is not always the case. Many social housing developments are equipped with electric night storage heaters (or more recently heat pumps), which can allow significant flexibility. But this leads to the second of our interactions, around what we describe as the ‘controller’ of flexibility capital.

We argue that households with more disposable income are more likely to own the sources of their flexibility capital (such as an electric vehicle), and furthermore, due to their relative affluence, feel the obligation to release it in return for bill savings less keenly. If they do choose to release it, it is on their own terms.

Conversely, the less affluent are less likely either to own technologies which bring them flexibility capital, or feel as much choice around whether or not to release it. This is because either the imperative to make a saving is felt more strongly, or because it is genuinely outside of their control, such as if they are signed up to participate in a demand response programme by a landlord.

These interactions are summarised in the following figure.

Figure 1: Flexibility interactions

Figure 1: Flexibility interactions.

Those in the upper left quadrant are less flexible, but are ‘not bothered’ (*potential oversimplification fully acknowledged!) because any bill impacts they might experience are minimal in the context of their disposable income. Those in the lower left quadrant, however, are hit harder and may find themselves moved closer to (or deeper into) energy poverty.

People in the top right quadrant can, if they choose, make savings (or income) through their flexibility, and do so at minimal discomfort due to the technologies relied on for flexibility. Such savings are also open to those in the lower right, but may not feel fully voluntary if making such savings is a (perceived or real) financial necessity or is done at the behest or choice of some other party. They are also more likely to come at a cost to comfort or convenience.

Importantly, in the context of a system such as the electricity grid that operates within strict constraints, those with flexibility capital must ‘make space’ for those without – for some this will be a matter of choice, for others it may feel more like a matter of obligation. We suggest the dynamic described here are likely to become increasingly pronounced in the future if flexibility continues to become a more central part of the energy system.

Practical implications

So, what does this mean in practice? In our paper we propose a number of interesting avenues for further research – but also bring attention to some immediate practical implications.

Firstly, it is clear people with less disposable income and who lack flexibility capital are likely to be particularly vulnerable. This is already quite well acknowledged, and there is recognition that special arrangements may have to be made to make sure that (especially) people in vulnerable situations are protected.

It is a more nuanced situation for those with more flexibility capital. Clearly there are substantial individual and societal benefits to allowing this flexibility to released and rewarded for the good of the system. We must continue to seek ways of doing this effectively and attractively. However, we must also remain alert to the possibility that for people with little real or perceived choice around whether and how to release their flexibility, this could come at substantial detriment to the level of service they experience.

An example: the regulator Ofgem is planning to explore the option of allowing small users (e.g. households) to be rewarded for choosing to receive different kinds of access to the electricity grid (such as reducing ‘firmness’, or constancy of supply) above a basic ‘essential’ level of service. This is understandable as the grid approaches capacity. But – depending on where any hypothetical ‘essential’ service level is set – there is a risk of creating a two-tier system, with some benefiting from this while relying on (e.g.) home battery storage, while others suffer through it by going without the energy services they need.

While Ofgem are clearly taking these questions seriously, we hope that by setting out the opportunities and challenges in a clear and systematic way, our work on flexibility capital/justice will be a useful prompt and aid in thinking through the implications and trade-offs involved in transitioning to a low-carbon, more flexible energy system.

We welcome your comments and questions on this work. Michael Fell is a researcher at UCL Energy Institute, and Gareth Powells is a lecturer at Newcastle University.

Banner photo credit: Louis Reed on Unsplash