Consumption flexibility
Consumption flexibility, or demand flexibility means reducing, increasing, or shifting energy consumption based on energy availability, energy prices, and the emissions generated by energy production. Energy consumption in homes can be regulated or optimized, for example, by altering consumption habits to save resources or to promote a more environmentally friendly lifestyle. Demand flexibility can also be achieved through smart energy solutions, such as energy consumption monitoring and control systems, solar panels, and energy storage systems. These systems can help optimize home energy consumption and enable participation in electricity markets, where consumers can flexibly respond to price fluctuations.
Typical examples of demand flexibility include lowering electric heating during workdays or trips, heating water at night, avoiding the use of an electric sauna when electricity prices are very high, and scheduling the charging of an electric car for the early morning hours. On the first Friday of January 2024, Finland experienced record-high electricity market prices, which led to a reduction in electricity consumption both in homes and in industry. In addition to the price signal, Fingrid's request for electricity conservation efforts guided Finns to adjust their electricity consumption. This involved saving energy during peak price periods and shifting consumption to times before or after high electricity prices.
Future energy solutions
Future energy solutions are based on renewable energy sources, such as wind and solar power. The challenge with these energy sources is their intermittency and ensuring sufficient availability at all times. On sunny and windy days, renewable energy is abundantly available, whereas on calm, cold days—when consumption is high—production is low. Timing consumption to when renewable energy is abundantly available not only saves money but also reduces the environmental impact of electricity consumption. Electricity price fluctuations may continue to be significant, with prices potentially rising to very high levels or even falling to negative values. Price spikes are expected to be mitigated thanks to demand flexibility. Shifting electricity consumption from more expensive to cheaper times reduces the electricity bill and can even lead to a permanent reduction in total electricity consumption. On the other hand, new price spikes may occur if the timing shifts of different consumers' electricity consumption coincide.
Consumption flexibility in households
In households, demand flexibility and energy savings can be achieved by paying particular attention to heating, air conditioning, electric vehicles, appliances, and lighting. There is significant demand flexibility potential in scheduling and occasionally reducing the heating in electrically heated homes. Demand flexibility can be achieved through manual adjustments, home automation, or changes in energy behavior. Effective demand flexibility utilizes a variety of information for both behavioral guidance and automation, including electricity prices, weather forecasts, indoor temperatures, and room- or consumption-point-specific energy monitoring data. Some automation systems learn and predict a home's electricity consumption patterns and needs based on weather and price information. They can also integrate optimization of energy consumption with potential in-house electricity generation, storage, and timed consumption units (such as a programmable washing machine or electric vehicle charging). These systems enable demand flexibility without compromising on living comfort. Automation systems range from point-specific smart plugs to comprehensive home energy optimization systems.
Finns have increasingly moved to electricity market contracts, but demand flexibility has previously been achieved through the use of general night electricity contracts. Night electricity, also known as time-of-use electricity, means that the price of electricity is lower during night hours compared to daytime hours. Since electricity consumption in homes is highest in the morning and after work hours, shifting consumption, such as storage heating, to nighttime has benefited households with night electricity contracts and helped smooth out daytime consumption peaks. The importance of demand flexibility becomes even more pronounced as the energy system transitions to carbon neutrality. The increasing share of weather-dependent and thus variable renewable energy sources, such as wind and solar power, in electricity generation necessitates flexibility measures on the consumption side.
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