Guidance

Removing charges to unlock energy flexibility

Published 4 November 2026

Factsheet relating to the Energy Independence Bill.

Summary

Electricity flexibility enables consumers to access cheaper rates by shifting their electricity use to times when demand is low or renewable energy is more abundant. It is fundamental to delivering clean, homegrown power and to creating a more efficient system which lowers costs for all consumers.

Currently, some types of flexible electricity use are inadvertently disincentivised by the way in which certain charges are placed on electricity suppliers. By ensuring that these charges are updated to better reflect the flexible use of electricity, the government aims to incentivise greater flexibility, resulting in lower bills for consumers and businesses.

Why are we legislating?

We are legislating so that we can change the way that certain charges are placed on electricity suppliers so that they better reflect the flexible use of electricity.

The flexible use of electricity is essential to reducing the overall cost of our electricity system. This includes flexible storage technologies such as small scale batteries and vehicle to grid bidirectional charging that can store electricity when it is cheap and clean and export it back to the grid at peak times. It also includes ‘demand turn up’, where consumers can access cheap electricity from excess renewable generation that would otherwise be wasted.

This flexibility is not currently reflected in the way that some charges are placed on electricity suppliers. Specifically, this applies to charges placed on suppliers based on the volume of electricity that they supply, and which are typically passed through to consumers. Currently, these charges are applied unfairly even where the electricity is not actually used and is instead exported back to the grid. They can also disincentivise consumers from being able to access cheap electricity from excess generation.

What are the government’s objectives with this measure?

This measure aims to unlock greater consumer‑led flexibility by ensuring that charges placed on suppliers more fairly reflect the flexible use of electricity. This will help to increase participation in flexibility services and support the development and uptake of the flexible technologies that enable it, whilst also enabling us to harness cheap excess electricity generated by renewables that may otherwise be wasted.

This measure contributes directly to the overarching objectives of the Energy Independence Bill by removing barriers to crucial energy flexibility, helping make our energy system cleaner, more efficient and more cost-effective.

How will this measure deliver these objectives?

The measure provides the Secretary of State with powers to remove certain charges from electricity that is re-exported to the grid, including through battery storage or vehicle-to-grid systems, or where electricity usage is increased to absorb excess renewable generation that would otherwise be wasted.

This will help to encourage the flexible use of electricity whilst also unlocking low-cost electricity from excess renewable.

Impact assessment evidence indicates that for households re-exporting electricity using vehicle-to-grid systems alone the measure could reduce bills and deliver cumulative national household savings of around £200 million between 2025 and 2040, while also increasing flexibility available to the system.