Demand Response and the Capacity Market: Unlocking Flexibility in the Metal Recycling Sector

The UK metal recycling sector faces rising energy costs, tightening environmental regulations, and increasing pressure to enhance operational resilience. Two energy flexibility strategies are emerging as key solutions: Demand Response (DR) and participation in the Capacity Market.

These approaches go beyond energy management – they create opportunities to reduce costs, generate revenue, and support grid reliability while maintaining throughput and compliance.

The Capacity Market was introduced in 2014 to ensure that the electricity grid has enough power during periods of peak demand. It rewards businesses for being available to reduce grid consumption or switch to on-site generation, helping to avoid blackouts and reduce reliance on fossil-fuel peaking plants.

The Capacity Market pays business for being available to reduce consumption or supply power when the grid needs it most. This creates a new revenue stream and helps offset rising energy costs.

Metal recycling facilities are energy-intensive, often operating continuously, yet they are also suitable characteristics that make them ideal candidates for Demand Response and Capacity Market participation:

• Batch processing flexibility: Shredding and smelting can be rescheduled
• Thermal inertia: Furnaces and kilns retain heat, allowing brief pauses in energy input
• On-site generation: Backup systems reduce grid reliance
• Advanced control systems: Automation enables real-time adjustments
• Auxiliary equipment: Conveyors, fans, pumps and non-critical loads can be curtailed
• Water treatment: Can be shifted or slowed

By taking a holistic view of energy assets, recyclers can uncover significant flexibility and turn it into a competitive advantage.

Energy flexibility is becoming mainstream:

• NESO expects flexible capacity needs to grow 4–5x by 2030, reaching 10–12 GW
• Rising energy costs and decarbonisation targets are expanding DR and Capacity Market programs
• Digitalisation and smart metering offer more control for recycling sites to integrate real-time energy management
• Industry reports highlight energy flexibility as crucial for resilience and margin protection

For metal recyclers, energy flexibility is a strategic lever. By participating in DR and the Capacity Market, companies can:

• Control energy costs
• Support grid stability and renewables
• Generate additional revenue
• Demonstrate leadership in the low-carbon transition

Now is the time to assess your energy footprint, identify flexible assets, and build a roadmap for participation.

Get in touch to explore how we can help your business unlock energy flexibility for stronger performance and a more reliable grid.

Whether you’re exploring demand response for the first time or looking to optimise existing assets like generators or large electrical loads, the opportunity to unlock value has never been clearer.