Demand Flexibility Service: How Your Home Battery Can Earn From the Grid

What is the Demand Flexibility Service?

The electricity grid needs supply and demand to balance every second of every day. When demand is high, the grid operator needs either more generation or less demand.

The Demand Flexibility Service (DFS), run by the National Energy System Operator (NESO), takes the second approach. Instead of generating more electricity, it pays households to use less. If enough households reduce demand at the same time, the effect adds up.

How a DFS session works

1. Your energy supplier tells you about an upcoming session, usually through its app or by email, and invites you to opt in.
2. During the session, your battery powers your home instead of the grid. Your smart meter records the reduction against your usual baseline for that time of day.
3. After the session, your supplier works out your reward from how much demand you reduced and credits it to your account.

Depending on your battery and supplier, you may be able to schedule the battery to discharge during the session window rather than doing it by hand.

How much will you earn?

Earnings depend on the session rate, how many sessions are called and how much demand you reduce in each one. Rates and session numbers change, so check your supplier and NESO for current terms rather than relying on a fixed annual figure. A battery is limited by both its capacity and how fast it can discharge, so a bigger battery only earns more if it can deliver more during the session.

Which suppliers offer DFS access?

You cannot sign up directly with NESO. Participation is managed through your energy supplier or a licensed aggregator. For example, Octopus Energy's Saving Sessions include NESO's Demand Flexibility Service. Check whether your own supplier takes part and how it pays rewards.

To take part you need an account with a participating supplier and to opt in through it. Octopus, for example, requires an electricity smart meter that sends regular half-hourly readings for Saving Sessions; check what your own supplier requires.

DFS on top of tariff arbitrage savings

The DFS is not a replacement for the main financial benefit of a home battery, which comes from charging overnight on cheap electricity and using it during the day. It is an extra on top. On Octopus Go, a 5 kWh battery saves up to about £450 to £530 a year in the best case (see how we worked it out). Any DFS rewards come on top of that, but the amount varies, so we do not add a fixed figure.

Practical tips

Automate where possible

If your battery and supplier allow it, schedule the battery to discharge during sessions so you do not miss one while you are out.

Check your baseline

DFS payments are based on how much your consumption drops compared with your usual use at that time of day. If you normally use very little electricity during the session, there is less room to show a reduction.

Time your battery charging

Make sure the battery is charged before a session starts. On Octopus Go, the cheap rate runs from 00:30 to 05:30, giving time to charge overnight.

Summary: is it worth taking part?

• DFS rewards come on top of your normal tariff savings.
• Once set up, taking part can be largely automatic.
• What you earn depends on session rates and how many sessions are called, so check current terms.

If you are working out how much a home battery can save you, treat DFS rewards as a variable extra rather than a fixed income.