Turning manufacturing flexibility into commercial value

Energy is no longer a fixed cost. By coordinating flexibility through a virtual power plant, UK manufacturers can unlock revenue, add resilience, and give themselves headroom to grow explains Enel X. 

Manufacturers are under pressure from every direction on energy: electricity demand is climbing as heat, transport and industrial processes electrify, grid connections are increasingly constrained, and prices remain volatile. Most have long treated energy as a fixed operational cost – something to be procured and managed, even when its costs rise markedly. But that’s changing. As growing renewable generation adds unpredictability to supply, there’s an increasing focus on flexible electricity to help match the two.

This flexibility simply means adjusting when and how much electricity a site draws from the grid – reducing or shifting demand when power is scarce, and increasing it when there’s a cheap, clean surplus. The National Energy System Operator (NESO) believes Great Britain will need a four-to-fivefold increase in demand flexibility by 2030, up from a capacity of around 2.5 gigawatts (GW) today. This growing requirement creates an increasing commercial opportunity for industrial energy users. In this environment, being flexible with electricity can enhance security of supply, make the most of limited capacity, and unlock new revenue that provides a competitive advantage.

Flexibility is not new – but it is newly accessible

It’s tempting to say that flexibility has become more valuable, but in our view that’s not quite the case. Flexibility has always had value, but this value has become far more accessible. The ability to adjust when and how a site uses electricity already exists inside most manufacturing operations: heat, machinery and refrigeration can be turned down for short periods, while non time-critical processes can be rescheduled. The challenge has always been accessing flexibility, and turning it into something that pays.

That’s the gap a virtual power plant (VPP) closes. In simple terms, it lets a manufacturer earn from flexibility it already has, without the complexity of managing energy markets directly. A VPP is a coordinated community of energy assets and adjustable loads that together act as a single power station, helping balance the grid. Its real advantage is reach: a single enrolled asset can participate across the full range of markets – from the Capacity Market and frequency response through to simple arbitrage – always directed to wherever the value is highest at a given moment.

We think of the VPP’s ability to aggregate many assets in multiple markets as like conducting an orchestra, with each asset contributing to the optimal market at a different moment. The Capacity Market supports the long-term security of the grid. Ancillary services such as frequency response call on assets to respond in anything from seconds to minutes, while the wholesale and balancing markets reward shifting energy use across the day. Alongside these markets, there’s value the site simply keeps for itself: shifting use out of the most expensive periods and trimming non-commodity charges – the network and policy levies bundled into energy bills, which fall as peak-time consumption drops.

For the manufacturer, the appeal comes down to three things: new revenue from flexibility you can provide without disrupting production, better use of infrastructure you already own, and improved resilience – participation supports the grid and thus helps secure your own supply. The VPP model is simple to join; you sign up to a single service, and the VPP maximises participation and value on your behalf.

It’s commonly thought that participating in grid flexibility is incompatible with industrial processes that might need to run near-constantly, but in practice that’s not the case. The goal is never to shut a site down, but to find where smaller, controlled adjustments can be made. Often it’s possible to shift energy use from one part of the day to another while still meeting production schedules. The customer always retains ultimate control over whether it responds to events.

Flexibility isn’t just suited to one type of business. We’ve mentioned the refrigeration typical of food and beverages, but heavy industries such as steel, cement and glass can also flex through controlled load-shifting. Even continuous processes such as chemicals or paper usually contain stable electrical loads that can be optimised for participation. Potential flexibility assets are found outside of production lines, too, with electric vehicle chargers, combined heat and power units, heat pumps, and battery energy storage all highly suitable.

Creating the headroom to electrify

In this age of constrained grid connections, flexible assets can be an enabler for a site’s wider growth and environmental plans. Large-scale decarbonisation programmes such as a fleet-wide EV rollout depend on there being sufficient electrical capacity to the facility, with upgrades being notoriously slow and expensive to secure.

Having flexible assets on site can help address that challenge, lowering demand at the connection and creating headroom for new electrified loads. Battery energy storage systems (BESS) are particularly powerful here: a battery installed to relieve a capacity constraint is, conveniently, an ideal VPP asset – storing and releasing electricity to support electrification while also earning in the markets. An investment made to enable growth can also generate a return.

Coordinating assets across multiple markets while keeping a site’s constraints in view is genuinely complex: no manufacturer should need to master it while also running a business. The practical approach is to start from the site, engaging a trusted partner to help establish what its assets can and cannot do, and what its non-negotiables are. Get the initial understanding right – including how quickly assets can respond, how often and for how long – and value can be stacked across several markets without any threat to operations. In fact, it’s quite the opposite: participation in flexibility helps support the stability of the grid, and therefore helps improve the security of a facility’s electricity supply.

What it looks like in practice

Flexibility looks very different from one operation to the next. One UK milling business participates through simple operational curtailment across several sites – around five megawatts in total. No single site represents a large volume, but when aggregated together the value is significant, with a five-year gross revenue estimate in excess of £1.3 million. A separate manufacturer takes a different route, enrolling a major heat pump alongside some curtailment, for a five-year gross estimate above £1 million. Neither uses the same operating model – the value comes from matching the approach to the site, its assets and its needs.

The first step to creating revenue through VPP participation is simply understanding what flexibility already exists across your site or portfolio – and many manufacturers are surprised by how much untapped value is already there. From that starting point, a business can expand as confidence grows. Nothing can be modelled until a site or portfolio’s operational priorities and constraints are understood – which begins with a conversation, and a visit. Manufacturers know their operations better than anyone: partners like Enel X translate that knowledge into a flexibility strategy that pays.

Enel X works with manufacturers across the UK and internationally to coordinate flexibility through its virtual power plant. To explore what your site or portfolio could achieve, visit enelx.com/uk.