How Industry Can Leverage the Decentralised Energy Revolution

National Grid ESO’s ambition to achieve a zero‑carbon grid by 2025 signals a bold transformation of the UK electricity system. This “road to net zero electricity markets” presents both immense opportunities and serious risks for industry – those who adapt can thrive, while those who resist may face penalties.

Andrew Normand, Business Manager at Encora Energy, explains how industrial users can position themselves to benefit from the decentralised energy revolution.

The energy landscape is shifting rapidly. Demand‑side technologies, new market structures, deregulation and the accelerated uptake of renewables are all driving a move toward a more distributed grid. For industrial users, this shift offers a chance to play a pivotal role in the UK’s decarbonisation while reducing energy costs.

Over the past decade, renewables have entered the market faster than expected. In 2023, they supplied a record 41 % (120.3 TWh) of Britain’s electricity, a trend mirrored across Europe, according to EnAppSys market data. Large offshore wind, solar and other renewable projects have displaced many fossil‑fuel plants, creating a more diverse generation mix.

While this shift has already delivered stability, the next wave of change will demand that end‑users – both domestic and industrial – adjust their consumption patterns. This will involve integrating distributed generation, expanding electric vehicle fleets, and building robust charging infrastructure. National Grid ESO will need substantial support to maintain grid reliability and flexibility.

Achieving this will require investment in infrastructure, a data‑connected grid, revamped market mechanisms, and significant demand‑side response. For industry, the payoff is clear: those who understand the market and adapt their energy use will reap rewards; those who do not will face higher costs.

Recent regulatory changes, such as Ofgem’s Targeted Charging Review (TCR), have already begun to reshape costs. Firms can no longer rely on simple triad avoidance or luck to sidestep charges, and the ability to receive payments for balancing services is being curtailed. Every connection now carries implications for the grid’s balancing act, making technology, trading flexibility, storage, and generation choices critical.

The key for industrial users is to identify how to maximise these opportunities by engaging with the market strategically – benefiting both themselves and the wider system.

Many companies are exploring technologies like hydrogen, solar, wind, battery storage, and heat storage. While each offers distinct advantages, the most valuable question is not whether to adopt a specific technology, but how those technologies can enhance market interaction and deliver maximum benefit.

Key Evaluation Areas for Industrial Users

• Total energy needs (heat and power) and flexibility potential – can consumption be reduced or shifted?
• Route to market – trading excess power, importing and storing energy, and leveraging flexibility services.
• Market knowledge – understanding pricing, contracts, and regulatory changes.
• Incentives and subsidies – identifying available financial support.
• Technology feasibility – evaluating the full range of options to make informed choices.
• Investment and economic assessment – projecting costs, returns, and pay‑back periods.

Comprehensive Study Components

• Optimise energy consumption patterns to minimise costs (e.g., time‑of‑use strategies).
• Leverage behind‑the‑meter generation to cover peak demand and export surplus, particularly using renewables.
• Implement combined heat and power (CHP) to maximise overall efficiency.
• Deploy automatic demand‑side response or turn‑up services to further reduce costs.
• Utilise electrical and thermal storage to manage critical periods and capture price arbitrage or grid services.
• Size and modify grid connections, including export capability and compliance with TCR changes.

Strategic Outcomes for Industrial Users

• Understand market implications of potential solutions.
• Assess the viability of trading excess power to lower overall costs.
• Build relationships with suppliers, traders, and financiers to manage costs and CAPEX.
• Negotiate supply contracts and PPAs that align with business objectives.
• Explore capacity market participation to subsidise generation and export.
• Evaluate investment requirements, ROI, and overall economics.
• Determine technical feasibility – generation, storage, grid compatibility, and project practicality.

By fully understanding and engaging with a decentralised market, industrial users can reduce costs, enhance energy efficiency, and unlock new revenue streams from excess generation, capacity, and stability services.

Decentralised energy also reduces transmission losses, boosts supply security, and accelerates the shift to renewables, driving down carbon emissions.

Encora Energy partners with EnAppSys and a network of developers and traders to provide industrial users with a holistic view of their market role, helping them assess the technical and economic feasibility of new revenue streams in a decentralised system.