It’s time for grids—and governments—to get serious about demand response

Posted: October 22, 2025

During my nine years as CEO of the U.K.’s National Grid (2007–2016), the share of electricity generated by renewables grew from 3% to 16%. That growth trend has continued to the present day—now about 40% of the U.K.’s electricity is generated by renewables. The current government wants that number to be 95% by 2030.^[1]

It’s called the energy transition, but really, this is an energy revolution. We’re in the process of totally reconfiguring the supply of electricity.

Considering the extent of the change, it’s remarkable how little disruption has been felt by the consumer. That is not to say, however, that the energy transition has been straightforward to deliver—the engineering challenges have been significant.

Shortly before I joined the National Grid, its analysts estimated that the grid, as it was then configured, could only handle a maximum renewables share of 23%. Getting up to 40% has required unprecedented supply-side investment, flexibility and ingenuity. For the next phase of the energy transition to be successful, we need to apply similar levels of imagination and effort to demand and consumption.

The practice of demand response, as it’s known, is a tricky sell. But if done right, it will help us reach our 2030 targets, contribute to the resilience of the grid (at a time when electricity is more critical to the country than ever before) and unlock enormous economic opportunities in the form of lower energy prices.

The potential of demand response

To understand the potential of demand response, it helps to first understand how grids are designed. The details vary from country to country, but the fundamental premise is the same everywhere: They're all designed to be able to meet the highest conceivable power demand.

The result is that we have historically built surplus storage and generation for the moments when there’s an extraordinary peak in demand.

There were good historical reasons for this approach. We had an imperfect sense of demand levels, and certainly no way to control them, meaning excess capacity was the only surefire way of avoiding blackouts.

None of that is true anymore. The explosion of data and technology means we have a highly accurate, real-time picture of demand. We also have the technology to start influencing it.

The idea of influencing demand might raise for some the specter of central planning and politburos. Rest assured, that’s not at all what we in the industry mean when we talk about demand response. Increasing electrification, renewables, battery storage and software systems mean there is more flexibility than ever in the grid. Demand response is about leveraging that flexibility to keep the network stable and prices low.

To give an example: Refrigeration in supermarkets consumes about 1% of the electricity in the U.K., according to a 2011 study financed by the Department for Environment, Food and Rural Affairs. In a period of peak demand, we could just switch off some of those fridges for a bit. The food inside wouldn’t spoil, supermarkets could save (or even earn) some money, and the nationwide grid wouldn’t need to draw on any backup fossil sources.

The trouble is that consumers are so totally unused to the idea of their electricity provider having any say over consumption that even this benign example would horrify many of them.

Tailoring demand response for industrial, commercial and residential consumers

Consumers are, of course, not a monolith. In the U.K., they can broadly be divided into three groups: industrial, commercial and residential. Although all three blocks are drawing on the same system, they have different patterns of consumption and attitudes toward demand response.

For commercial consumers, the current attitude is one of disinterest. I’m in touch with several businesses in the U.K. offering services that allow these consumers to become de facto power plants by shaving their demand and putting power back into the system. Yet because power consumption is low down on individual consumers’ operational agendas, these control systems are surprisingly hard sells.

Demand response is an even harder sell to residential consumers, who are wary of Big Brother–like intrusions.

I will never forget the pilots we ran at the National Grid with customers in Massachusetts and New York. The pilot had four tiers of technology. The highest tier gave us modest control over home appliances—we could do things like turn the temperatures of freezers up a bit and decide when dishwashers started their runs.

I naively thought customers would jump at the chance to get this expensive and cutting-edge technology for free. We ended up having to pay people to take it into their homes.

Technology, incentives and communication

A commercial demand response program should look very different from a residential one, which in turn should look different from an industrial one. Any successful program, however, will require the same three things: capable technology, the right pricing mechanisms and persuasive communication.

We’ve nailed the first requirement, and we’re making progress on the second, but efforts around the third are lagging. Although consumers are currently uninterested and suspicious, I think better communication from energy providers and the government could quickly change their minds.

After all, the core benefit of demand response is lower energy prices. The painful price spikes of 2022–2023 have surely made consumers more receptive to measures that would help keep prices low.

The secondary benefit—which won’t appeal directly to consumers but could help clarify energy companies’ motivations—is that demand response makes the grid more flexible and therefore more resilient. New technologies are emerging, consumers’ demands are changing and the energy transition is in full swing. All this makes it very hard for the sector to predict exactly what energy systems of the future will look like. Demand response gives the system some much-needed wiggle room.

Twenty years ago, the supply of electricity flowed in one direction. Now, thanks to distributed renewable generation, it flows back and forth between the grid and consumers. That represents a profound change in how we conceive of supply.

But supply is only half the story.

For us to complete the energy transition, we will need a similar rethink of demand. It won’t be easy—changing public attitudes can take time—but all the tools we need are already at our disposal. There’s no reason to wait. Let’s get serious about demand response.

Listen: What the energy transition looks like from inside the grid

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^{[1] The target also includes nuclear power.}