The water company is set to earn £5 million from National Grid over the next five years as it offers the system operator balancing services by turning off pumps at its treatment plants at times of peak demand.
Over the next 12 months the company is set to install 10MW of demand side response, with additional capacity being introduced by the end of the decade.
The development comes after the automatic demand response system was trialled at three wastewater treatment sites in the North West.
UU energy manager Andy Pennick said: “Water and wastewater treatment is a really energy intensive process – power is one of our biggest operating costs – so we’re looking both inside and outside our business to see how we can work smarter.
“That means using less power and being willing to be flexible in the way we use that power.”
The move comes after National Grid announced it is considering extending the option to purchase balancing services for winter 2016/17 and 2017/18, due to “uncertainties” around supply and demand outlook prior to the capacity market coming into force in 2018/19.
UU is also continuing to invest in renewable generation and expects to be able to generate 200GWh of renewable energy by 2020.