Heat pumps, storage heaters and heat batteries will have to meet minimum standards of “smart functionality” by 2026 under new rules laid down by government.
The Department for Energy Security and Net Zero (DESNZ) has confirmed that it will be introducing a “smart functionality” mandate for certain types of electrical heating appliances.
It said doing so will unlock domestic flexibility and demand side response (DSR) opportunities while ensuring that consumers are protected from mis-selling of services and threats such as cyber attacks.
The smart mandate is included within a consultation on the government’s Smart Secure Electricity Systems (SSES) Programme.
In particular, the consultation will look at introducing minimum requirements for cyber security and grid stability as well as minimum product standards for energy smart appliances (ESAs).
The consultation adds that the mandate is “intended to ensure that devices with the greatest load potential (heat pumps, domestic battery energy storage systems and electric vehicle chargers) meet minimum levels of security and functionality”.
The mandate will cover four areas, including:
Interoperability: The government intends that ESAs can receive and respond to time-of-use tariffs from different energy suppliers, and that they can access DSR services offered by different DSR Service Providers. This will provide a minimum level of interoperability that will be essential to promoting growth in markets and building consumer demand for these services.
Cyber security: The government will set out requirements to protect against cyber security risks at both the device and system levels, which will inform future technical and regulatory frameworks for ESAs. These requirements will be in addition to cyber security requirements for organisations remotely controlling electrical load, and subject to licensing requirements.
Data privacy: Any future technical solutions for ESAs (such as ESA standards) will need specific data privacy requirements to ensure that data privacy and data security risks are mitigated, particularly when data is shared between devices, systems and organisations. Government will ensure that these requirements are fully compatible with UK data protection laws.
Grid stability: The government has proposed that future policy should mitigate risks posed to the grid by ESAs, such as synchronised changes in load (‘herding’) of ESAs at scale, unexpected step-changes or ramps in electricity usage at scale, oscillation in energy usage or production by ESAs at scale, and an inability to provide the flexibility needed by the energy system when necessary.
The consultation document adds that existing regulations on electric vehicle chargers already meet these requirements and therefore the mandate is focused on heating technologies.
The government has also ruled out mandating smart functionality for domestic Battery Energy Storage Systems (BESS), due to the “assumption that the market may be able to deliver smartness for BESS without such an intervention”.
The initial smart mandate will therefore apply to certain electric heating appliances, including hydronic heat pumps, storage heaters and heat batteries.
However, the government is also seeking views on expanding the scope of the mandate to include additional heating appliances such as hot water storage and generation and hybrid heat pumps.
The World Economic Forum (WEF) raised concerns about the lack of “connected heat pumps” in October 2022 when it revealed that less than a quarter (23%) of the devices installed worldwide were connected to the internet.
The WEF added: “Only 23% of all heat pumps are connected to the internet, and hardly any of them can be controlled remotely.
“Therefore, most systems cannot be used for demand response. This is beginning to change, where heat pump control systems can now be connected directly to the internet or through a gateway, an essential enabler for flexibility.”
The government’s own estimates are that smart systems and flexibility could create 10,000 jobs and increase GDP by up to £1.3 billion by 2050.
More than half of participants in a heat pump flexibility trial held by electricity network operator National Grid reported feeling “discomfort” at least some of the time while their heat pumps were turned off to reduce the strain on the electricity grid.
The Equinox project asked a pool of 350 customers to turn off their heat pump for two hours between 5-7pm from December 2022 to March 2023 to help determine the amount of aggregated flexibility which could be procured from domestic heat pumps without compromising customer comfort and safety.
This will ultimately help assess whether heat pump flexibility is a viable option for distribution network operators (DNOs).
The first-year results showed a mixed bag of results for comfort levels. At least 57% of participants, depending on how they were segregated, reported feeling discomfort at least some of the time during the trial, while between 3-5% of customers felt uncomfortable most of the time.
These findings differ from that of another small-scale pilot heat pump trial held between February and April 2023 by Octopus Energy’s Centre for Net Zero and Nesta, called HeatFlex, which found that 76% of customers were either ‘comfortable’ or ‘very comfortable’ during the flex windows.
Responding to the government consultation, Sarah Honan, head of policy at the Association for Decentralised Energy, said: “Public participation in our energy system is not a ‘nice to have’ but an absolute imperative to reach net zero in a cost-effective and secure manner.
“This publication marks another important step towards unlocking the value of demand flexibility through smart-as-standard devices and competitive customer offerings from a range of service providers.
“We applaud the Department for Energy Security and Net Zero for continued leadership, agility, and pragmatism in devising regulations fit for the future of this burgeoning industry.”
In January 2024 Utility Week established its Flexibility Forum, in association with our strategic partner CGI, to help break down barriers to energy flexibility growth and provide an independent setting for sense-checking the direction of travel in flexibility market governance and regulation. The Flexibility Forum community includes stakeholders from across the energy value chain. Outputs from the forum to date include a report of the status of demand side flexibility markets in GB and a review of the discussion at the Forum’s first meeting.