Lord Vallance calls on tech experts to design ways to help reduce electricity bills
Source: gov.uk (2025-08-06)

Science Minister Lord Vallance calls on businesses and researchers to develop cutting edge tech, that could cut energy costs in the long-term.

- Businesses and researchers to turbocharge AI and digital tech to cut peak demand for grid electricity by 2 gigawatts – equivalent to powering over 1.5 million homes
- It could slash UK reliance on expensive, polluting fossil fuels at the busiest times, boosting energy security and helping to cut energy costs
- Part of new R&D Missions Accelerator Programme, which backs R&D to directly deliver on core missions, with clear and ambitious targets
- Scheme could use AI and digital technologies to predict household demand or charge electric vehicles when energy is cheaper.
Households could benefit from cheaper bills thanks to AI as Science Minister Lord Vallance challenges tech experts to come up with cutting edge tech that will help shift peak electricity demand by 2030 (Thursday 7 August).

An initial £4 million for the first year of a five-year challenge will support researchers to come up with solutions that help shift electricity demand in evenings and weekends by 2 gigawatts – potentially cutting energy costs in the long-term for the consumer, boosting our energy security, and further reducing our reliance on fossil fuels – helping to make Britain a clean energy superpower and delivering on our Plan for Change (https://www.gov.uk/missions).

As demand for energy spikes – like in the early evening when people return home – the grid often turns to gas-fired power stations, which are more expensive and more polluting, while leaving the UK exposed to volatile global gas markets.

The work of innovators across the UK will deliver better forecasting, as well as help manage and shift demand at busy times by the equivalent to the amount used by one and a half million homes. Examples could include:
- Getting AI to predict how much energy we’ll use days ahead of time. It can do this by plugging in data from things like smart meters, weather forecasts, and when people have the telly on.
- Automatically heating or cooling buildings when clean energy is most available, and at its cheapest.
- Using parked electric cars as giant batteries - charging them when electricity is cheap and sending power back to the grid when it’s needed.
This could reduce the need to build network infrastructure and new power plants, leading to a reduction in consumer bills in longer term – supporting our mission to make Britain a Clean Energy Superpower by 2030 through generating at least 95% of UK electricity from clean sources and delivering on a key pillar of our Plan for Change.

The Clean Energy: 2GW Peak Time Flexibility challenge is the first of 5 to be announced as part of the R&D Missions Accelerator Programme – backed by £500m set out in the Spending Review. It is also the first time government has set a clear, measurable and stretched target for R&D to deliver its core missions.

The project will be led by UK Research and Innovation (UKRI) in collaboration with the Department for Energy Security and Net Zero (DESNZ), which is responsible for leading the government’s clean energy mission.

Science Minister Lord Vallance said:

We’re calling on Britain’s brightest minds and innovative businesses to help us cut energy bills, boost energy security, and reduce our reliance on fossil fuels.

This is a challenge with real impact – if we get it right, we’ll save families money, protect the planet, and make the UK a clean energy superpower.

R&D has the power to change lives and we want to harness it to deliver real, measurable progress towards the government’s 5 missions and turn bold ideas into real solutions by 2030.

Minister for Climate Kerry McCarthy said:

We are working to build a more flexible electricity system, giving households more choice and control over when and how they use energy.

This new challenge will help deliver that, exploiting the exciting potential of AI and other cutting-edge tech to help more people access flexible tariffs and save on bills as part of our Plan for Change.

The initial £4m of funding will by April 2026 bring Britain’s expert AI and energy businesses, universities and research organisations together to explore where current solutions can be scaled up, build use-cases and enable testing – including building simulation and modelling capability – so successful products can be brought to market more quickly.

The programme will also look at where government involvement and funding can help to get them moving and improve people’s lives more quickly.

Further challenges will be launched over the coming weeks and months on how cutting-edge research can help make our streets safe, build an NHS that is fit for the future, break down barriers to opportunity and unlock growth to deliver our Plan for Change.

Funding will be awarded to a consortium of existing world-leading centres based around the UK including the Energy Systems and Digital Catapults, and other leading research institutions to lead the work.

Susan Bowen, CEO of Digital Catapult, said:

Digital Catapult is laser focused on accelerating the practical application of deep tech to boost business performance – an outcome of this work is to decarbonise our key sectors, optimising energy efficiency for businesses and consumers alike.

Our delivery of this programme underpins the government’s goals to kickstart economic growth, position the UK as a clean energy superpower, and harness digital innovation to deliver smarter, more sustainable energy systems.

Shubhi Rajnish, Chief Information Officer at the National Energy System Operator (NESO), said:

With nearly 2 million households already registered to our world-first Demand Flexibility Service – rewarding customers to turn down or shift their energy use during peak hours – we know that smart innovation really can make a difference.

Harnessing new technology like AI to optimise the way Britain uses its electricity isn’t only going to help make things more affordable for consumers, it’s going to help reduce our reliance on fossil fuels and improve energy security, helping us on our road to clean power by 2030.

Marzia Zafar, Deputy Director for Energy Systems Management and Security at Ofgem, said:

Encouraging energy companies and innovators to develop their AI capability and trial new products and services is key to a low carbon future, and at Ofgem we’re hugely supportive of those at the forefront of those efforts.

I’m really excited to see how the new ideas this funding enables will lead to a more efficient and better functioning energy system for us all.

Sonia Brown, Group Head of Strategy, Innovation and Market Analytics at National Grid, said:

Innovation across Britain’s electricity networks is already helping to deliver a smarter, more sustainable energy system.

This new initiative will build on that momentum, boosting efforts to harness AI and digital technologies to reduce peak demand and support a more secure, affordable and clean energy future.

DSIT media enquiries

Email xxx@xxx.xx (mailto:xxx@xxx.xx)

Monday to Friday, 8:30am to 6pm xx-xxxx-xxxx