Policy background Part 9: Energy Smart Appliances and Load Control
Transitioning to a smart and flexible energy system is essential to improving energy security, reducing consumer bills, enabling new and innovative industries to flourish, and meeting the UK’s net zero targets. A smart system could reduce costs by up to £10 billion a year by 2050, by reducing the amount of new generation and network infrastructure needed to meet increased electricity demand.
	In a smart and flexible system, consumers can shift their electricity usage to times when it is beneficial for the energy system and be rewarded for doing so by saving money on their energy bills. This is often termed "Demand Side Response" (DSR), and the activity of sending signals to Energy Smart Appliances (ESAs) to control their consumption is referred to as "load control." ESAs are connected devices such as smart electric heating appliances, batteries, and smart Electric Vehicle (EV) charge points, which can adjust their energy consumption to help deliver DSR.
	In line with the commitments set out in the Smart Systems and Flexibility Plan (2021) 27 and the Energy White Paper 2020 28 , the Act will allow the Government to establish a new regulatory framework for smart energy. This includes provisions to set regulatory requirements for ESAs, to mandate that electric heating appliances must have smart functionality and to require certain activities related to load control to only be carried out by persons holding licences for those activities. In addition, the Government will take new powers to mandate smart functionality for smart EV charge points, in addition to those in the Automated and Electric Vehicles Act 2018, to ensure cohesive regulation across all ESAs.
	As the uptake of ESAs and related services increases, new risks such as cyber security and grid instability need to be mitigated. Furthermore, without intervention consumers may become locked-in to a particular service provider when they buy an appliance, or locked-out from certain services or tariffs. These new measures will enable the Government to ensure the electrification of heat and transport in particular can be delivered securely and at the lowest cost, saving consumers money on their energy bills while protecting the energy system.