Heat-as-a-service is a new model for selling energy, in which consumers buy an energy service tailored to their home and lifestyle instead of paying for kWh of gas. 

By utilising demand-side management, energy service providers anticipate the heat requirements of consumers and provide the requisite level of comfort. This approach encourages service optimisation, efficiency and has the potential to transform the energy sector and reduce consumer energy bills. But both government and industry needed a deeper understanding of the opportunities and constraints. 

Energy Systems Catapult in conjunction with the Energy Technologies Institute and the Department for Business, Energy & Industrial Strategy, explored the consumer and economic benefits of demand-side management, as well as viable business models for bringing it to market at scale.  

For this we utilised our cutting-edge EnergyPath® Operations simulation tool, for testing energy systems, technologies & business models in a risk-free environment.

​The Challenge

Most market research and academic studies on consumer energy usage look at averages – for example, the average amount of energy required to heat a property and the average person’s consumption habits. The problem is that the “average person” and their “average energy use” don’t reflect the reality of energy provision and network requirements when you’re talking about demand-side management and heat-as-a-service – because energy services are bespoke for each household.

Additionally, the integrated systems and technologies required to deliver heat-as-a-service at scale either don’t exist or are still in their infancy. Stakeholders therefore need evidence to inform innovation strategies, business models and policy development – and that’s where our modelling and systems engineering expertise came in.  

The Innovation

EnergyPath® Operations is our cutting-edge simulation tool developed for Dynamic Energy System Simulation, allowing stakeholders to test energy systems, technologies and business models in a risk-free environment. 

Using EnergyPath® Operations we were able to analyse demand-side management at a granular level, providing an accurate view of how it affects individual household behaviour, room temperature, network capacity, energy prices and consumption patterns. 

This allowed us to quantify the value of demand-side management – and understand how the energy market would develop as it was deployed at scale. 

The Solution

We simulated six months of household energy usage – with and without demand-side management. The EnergyPath® Operations simulation incorporated real-world data on building physics, weather, energy consumption, network capabilities and appliance specifications to create dynamic models of homes, markets, heating systems and consumer behaviour.

The Impact

Our research confirmed that demand-side management reduces the cost of providing energy. It quantified the savings at 3%, which totals £168 million over six months when scaled up to 28 million UK consumers.  

It also showed that demand-side management reduces peak loads by shifting consumption to times with lower demand – all while guaranteeing (and potentially enhancing) consumer comfort. This means it could help reduce the need for future network reinforcement. 

Importantly, the analysis also showed the best ways to structure new energy services so consumers want to buy them. The Department for Business, Energy & Industrial Strategy is now using our findings to inform its approach to supporting the market, so the supply chain can develop to deliver demand-side management in a viable way.