I was thinking about this the other day when reading, as one tends to do over a nice lunch at the local Italian bistro with a pizza and a glass of red, a 2015 position paper on ‘Making the electricity system more flexible and delivering the benefits for consumers’. This was issued by Ofgem (the quango which regulates the energy market in the UK) at the start of the ongoing process to transform our energy market into one governed by “energy smart appliances”. These, for those who have been paying attention, are electric devices (your fridge, your washing machine, your EV charger, etc.) which are able to respond to ‘load control’ signals issued through the internet, and thereby reduce or delay energy consumption. Or, to put it more bluntly, appliances which can be controlled remotely so as to limit how much electricity households are able to use. Coming soon to a kitchen near you.
The last time I wrote about this issue in substance was in 2023, not long before the Energy Act 2023 was enacted. That statute created the legal framework within which the use of energy smart appliances could be mandated and regulated. We now find ourselves entering the next stage: gradual implementation. A draft set of regulations, the Energy Smart Appliances Regulations 2026, is currently making its way through Parliament. This, we are told, is the “first phase“. The regulations, among other things, provide for “minimum smart functionality, safety, grid stability requirements and cyber and physical security requirements”, and “the creation of a single regulatory framework for smart appliances”. We can then look forward to a “second phase” beginning in 2027, when presumably things will start to get more serious.
What is going on? Clearly, and I use this phrase advisedly, a Deep State project is afoot. 2015 is quite a long time ago now: there have been four General Elections since then, not to mention 500 or so Prime Ministers and an awful lot of turmoil (Brexit, lockdowns, Ukraine, mini-budget, etc.). But the shift towards mandating the installation and use of energy smart appliances has continued regardless. It is almost as though it is not politicians who have been driving the policy, but Ofgem acting in cahoots with civil servants in the then-Department of Energy and Climate Change, who also issued a very similar policy paper in 2015 to Ofgem’s own. It is not our elected representatives who want us to use energy smart appliances, in other words. It is the regulators. And the policy is invincible to changes in government.
This makes it far more important, in getting to grips with the idea, to read what the regulators say over what politicians do. And what they say has to be parsed carefully. There is in fact a glossary of terms which of necessity have to be read esoterically – they are used not just to obfuscate but often actually to give the opposite impression to what is really going on. One has to grapple with the exoteric and often flip it upside down to find out what is underneath.
The Ofgem position paper which I mentioned earlier is a very good illustration. And this begins with the title: ‘Making the electricity system more flexible and delivering the benefits for consumers’. This sounds, on the face of it, like something benign. Indeed, if anything, it is suggestive of a free market approach – it looks to the naked eye as if the strategy is to liberalise the energy market in order to drive down prices at the supply side. But that is in fact more or less the exact opposite of what the position paper sets out. In fact, what it is focused on is something which it calls Demand Side Flexibility (DSF), or sometimes Demand Side Response (DSR) – better understood as precisely the reverse of supply-side reform.
What, then, is Demand Side Flexibility? Well, the position paper goes to great lengths to make clear what a good thing it is. Demand Side Flexibility, it says, is about “empowerment” of consumers. It is about helping them to “better monitor and manage their energy use” and “make informed choices about when they use electricity”. It us about giving them “opportunities to lower [their] bills by changing when and how [they]” do so. Indeed, it is about giving them the space in which to ‘smarten’ their approach to energy use in the round....<<<Read More>>>...