Demand flexibility services (DFS): What are they and how can I join?
The United Kingdom, now legally bound to slash its emissions by 100% by 2050 (compared to 1990 levels), has been wrestling with how to meet these ambitious targets without breaking the bank. The answer? A smarter, more flexible power grid.
With an electricity system increasingly powered by renewables—fluctuating with the weather and inherently unpredictable—balancing supply and demand has become more complicated. At the same time, the UK is keen to curb its reliance on imported gas, which is expensive, geopolitically explosive, and often a pricing rollercoaster.
Enter Grid Services—the brainchild of DESNZ, OFGEM, and NESO—a clever strategy designed to accelerate progress towards these goals without excessive spending. By leveraging demand-side flexibility, the UK can stabilise the grid, cut costs, and integrate more renewables, all while giving consumers a way to profit from smarter energy use.
The topic in a nutshell
Demand Flexibility Services (DFS) pay households to shift electricity consumption away from peak hours.
By participating in DFS, you help balance the grid, reduce reliance on fossil fuels, and lower system costs.
Combine DFS earnings with local flexibility markets to optimise energy savings and financial returns.
An introduction to grid services in the UK
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At first glance, this might sound like big-picture energy policy—far removed from your daily life. In reality, these shifts in how the grid operates directly impact homeowners. Not only can you help stabilise the system, but you can also earn money by shifting your energy use.
What are grid services?
Grid services are strategic tools used to keep the UK’s electricity system stable, reliable, and cost-efficient. They match energy supply with demand, ensuring that businesses and homes get power when they need it without overloading the grid.
Why is this crucial?
- Renewable energy is intermittent: solar and wind don’t produce power on demand.
- Electricity demand fluctuates: peaks and troughs put pressure on the grid.
- The UK needs to reduce fossil fuel reliance: importing gas is expensive and unstable.
Grid services address these challenges by balancing supply and demand in real-time and managing network constraints. This helps avoid costly infrastructure upgrades while maximising renewable energy use.
There are several types of grid services, each playing a different role:
- Balancing markets – Fine-tuning supply and demand on a second-by-second basis.
- Capacity markets – Ensuring there’s enough power available for high-demand periods.
- Local flexibility markets – Managing constraints at a regional level.
- Demand flexibility services (DFS) – Incentivising homes and businesses to reduce demand at peak times.
This article focuses on DFS events—how they work, why they exist, and most importantly, how you can get paid for participating.
What are demand flexibility services?
Demand flexibility services (DFS) are a pay-to-shift scheme designed by the National Grid Electricity System Operator (NESO) to help reduce strain on the grid during peak hours. Instead of firing up expensive backup power stations, NESO pays homes and businesses to shift their electricity use away from high-demand periods—typically 4:00-8:00 pm, especially in winter when heating and lighting usage surges.
The idea is simple: use power when it’s cheaper and get rewarded for it.
Why were DFS events introduced?
While demand-side flexibility has been discussed for years, the Russian invasion of Ukraine in February 2022 rapidly accelerated its implementation. The energy crisis saw UK gas prices spike by 40%, driven by supply disruptions and geopolitical instability. The government and NESO had to act fast, rolling out DFS to limit reliance on expensive gas imports and prevent blackouts
How did DFS perform in 2023/24?
During the 2023/24 winter season, DFS proved its worth:
- 16 DFS events were triggered.
- 2.6 million homes and businesses participated.
- 3.6 GWh of electricity was shifted by businesses alone—enough to power over 1 million homes for an hour.
How much can you earn?
Compensation varied widely, from 40 p/kWh to 600 p/kWh—far higher than the standard export tariff most homeowners receive for selling excess solar energy back to the grid.
DFS isn’t just about keeping the lights on—it’s about turning flexibility into cash. And the best part? You don’t need solar panels or fancy equipment to take part—just a smart meter and the ability to adjust when you use power.
Outlook on demand flexibility service events in the UK
As of 2025, demand flexibility service (DFS) events are no longer just a winter strategy—they now run year-round. That means more opportunities to earn money for shifting your energy use, though events will be more sporadic and entirely driven by real-time grid conditions.
What’s changed?
- No more scheduled events: Previously, DFS events were pre-scheduled, often with "day-ahead" notifications. That’s gone.
- “Within-day” dispatching: Requests now happen on the day, meaning you need to be ready to shift energy use at short notice.
- More earnings potential: Homeowners and businesses can now stack DFS earnings with revenue from local flexibility markets (run by Distribution Network Operators) and capacity markets.
The shift to a fully reactive DFS system signals that the grid is becoming more dynamic, more flexible, and more rewarding for those who take part. If you can adjust your energy use when needed, there’s real money to be made.
Beyond rewarding participants, DFS is proving to be one of the most cost-effective tools for balancing the UK’s electricity system. Estimates suggest it could reduce system costs by £30-70 billion by 2050, making it a critical part of the UK's energy transition.
One of the clearest demonstrations of its impact came in the 2022/23 winter, when DFS was deployed instead of costly coal plant reserves. The difference was staggering £11 million spent on DFS versus £340 million on coal the previous winter. A fraction of the cost, yet just as effective.
Given these results, NESO has concluded that DFS isn’t just useful in emergencies—it’s competitive even on moderately expensive days. This cost advantage paved the way for its full-year rollout in 2025.
What’s Next? The 2030 Outlook:
DFS is growing fast. In 2023, the UK procured just 2 GW of demand flexibility. By 2030, this is set to rise to 10-12 GW, according to the latest Clean Power 2030 report. With more capacity coming online, DFS is shifting from an experimental service to a long-term pillar of the UK’s energy strategy, offering consistent revenue opportunities for those who take part.
How do demand flexibility services work?
You might be wondering what the core differences between demand flexibility services and local flexibility markets is. Both inherently seek to solve the same issue, although at a different scale, that of load shifting during peak demand.
Figure 1 illustrates how demand flexibility services (DFS) in the UK shift energy consumption away from peak hours, reducing grid strain and improving efficiency. While DFS focuses on national and regional peak load management, local flexibility services (LFS) address more localised grid constraints, here’s how they compare:
What are the requirements to join demand flexibility services?
Taking part in DFS is simple—but there are a couple of boxes to tick before you can start earning rewards.
What you need to participate:
- A Smart Meter: You’ll need a smart meter that records half-hourly electricity usage so NESO can track your flexibility contribution.
- An Approved DFS Provider: You must sign up with a registered DFS provider—either through your energy supplier (see the official provider list) or an aggregator like Capture Energy. You can register with us by answering the short survey at the end of this article.
Boosting your DFS earnings:
While anyone with a smart meter can take part, having flexible energy assets makes participation easier and more profitable:
- Home battery storage: Charge when electricity is cheap, discharge during DFS events, and get paid for it.
- Smart appliances: Devices like programmable thermostats and smart water heaters can automatically reduce power use during peak hours.
- Electric vehicles (EVs): Shift your charging schedule or, in the future, use V2H (vehicle-to-home) technology to support the grid.
If you already have one of these assets—or plan to install one—DFS can be a valuable new revenue stream.
How much can I earn by joining demand flexibility services?
Back when DFS first launched, participants were offered a guaranteed acceptance price of £3,000 per MWh (or £3 per kWh). However, since November 2024, the scheme has transitioned into a in-merit mechanism, resulting in an uncertain landscape for the moment, as the first instance of rewards have dropped drastically compared to previous periods.
Because DFS events are now more sporadic and unpredictable in price, it’s difficult to estimate annual earnings. However, based on historical DFS event prices, table 2 below breaks down potential earnings for different appliances when shifting electricity usage away from peak times.
Note: Rewards are only paid on assets that have demonstrated a shift in demand patterns during DFS events.
Unlike local flexibility markets, which compensate participants for both availability (being on standby) and utilisation (actual energy shifted), DFS only pays for utilisation, given its short-notice activation.
How can I participate in demand flexibility services as a UK homeowner?
At Capture, we make it easy for homeowners to get involved in DFS and other grid services. We find you the right battery system, arrange installation, and manage it—so your home battery earns maximum revenue from DFS and other energy market opportunities when it makes sense.
If you want to participate but don’t yet have an eligible asset, get started with a free home battery quote today by answering the quick survey below:
"Implementing demand-side flexibility services such as the demand flexibility service (DFS) and local flexibility markets can lead to significant cost savings in grid investments. Research by Aunedi and Green (2020) suggests that with a 10% penetration of Smart Local Energy Systems (SLES), the UK could save approximately £1.2 billion annually by 2030, with potential savings reaching £8.7 billion per year if penetration rises to 50% under more stringent emissions targets."
