Strategic Innovation Fund

SNUG (Smarter Network Upgrades)

Project Data

Start date:

01/04/2026

End date:

31/08/2026

Budget:

£4,928,004

Summary

Snug aims to make energy flexibility markets easier for organisations to access by developing new commercial models. The project will enable social landlords to offer flexibility services through energy‑efficiency retrofits and clean energy technologies installed in their homes.

What is the project about?

The government is funding energy‑efficiency retrofits in low‑income and social housing, including measures such as insulation, rooftop solar, heat pumps and modern storage heating. These upgrades can reduce the total amount of energy used in these homes. This reduction in demand, particularly at busy times of day, is a form of energy flexibility known as peak reduction.

Distribution System Operators (DSOs) pay organisations for providing this kind of flexibility. However, social housing providers such as local authorities and housing associations, along with the disadvantaged households they support, currently face barriers that prevent them from taking part and benefiting from these payments.

At the same time, Distribution Network Operators (DNOs) are preparing the electricity network for the large‑scale electrification of heat. Greater use of flexibility and improved coordination between sectors can help reduce the cost and scale of network upgrades.

Project Snug aims to bring these activities together and close the opportunity gap. It will develop new ways for organisations to collaborate across the housing, energy and network sectors, making flexibility markets more accessible. This will allow DNOs to access more flexibility and reduce the need for expensive network reinforcement.

The project will also enable social landlords to unlock new income streams through the flexibility provided by their retrofit programmes. Ultimately, Snug aims to deliver benefits to social housing residents, many of whom are at risk of fuel poverty or being left behind in the transition to Net Zero.

How we’re doing it

Building on the findings of the Flex Direct SIF Discovery and Alpha phases, we are delivering a series of work packages to collaboratively address this challenge. Together, we are:

• Running trials in up to 300 homes
These trials will monitor the real‑world impact of installing energy‑efficiency measures and clean energy technologies, capturing how they affect energy use and the level of flexibility they provide.

• Comparing modelled and real‑world flexibility
We will model the typical energy savings delivered by different retrofit measures and compare these estimates with data from the trials. This will help validate how much energy flexibility can be reliably delivered.

• Working with social housing providers to design a new customer journey
Through workshops and interviews with local authorities and housing associations, we will map out an end‑to‑end customer journey for delivering flexibility aligned with retrofit programmes. This will improve our understanding of their awareness, the challenges they face, and the support a DSO could provide.

• Estimating flexibility potential across the wider housing stock
Using modelling, we will assess how much energy is typically saved by different retrofit measures across social housing more broadly. This will help predict the scale of flexibility that future retrofit programmes could unlock.

• Conducting a cost–benefit analysis
This analysis will identify who benefits from the new arrangements and how, covering social landlords, residents, DSOs/DNOs and the wider system.

• Developing a new flexibility mechanism and business proposal
We will design a commercial and operational model for a new flexibility mechanism, test it with industry stakeholders and outline the data and commercial requirements needed for implementation. This work will prepare the mechanism for future rollout across Great Britain.

What makes it innovative

Flex Direct Snug is exploring new commercial and contractual arrangements between social landlords and DSOs, and how these approaches could later be expanded to other sectors and technologies. We are adapting the traditional model for energy flexibility to make participation easier for social landlords, increasing opportunities for cross‑sector collaboration through retrofit delivery.

To support this, we are modelling the impact that different energy‑efficiency measures can have when installed in social housing. This will help both the DSO and social landlords estimate the level of peak‑demand reduction delivered through retrofit schemes, without relying on smart‑meter data.

The Flex Direct Snug proposal will enable disadvantaged households in social housing to participate in, and benefit from, energy‑flexibility services. This forms part of UK Power Networks’ commitment to ensuring no one is left behind in the transition to Net Zero, building on the learnings from our Socially Green project.

What we’re learning

Through the project we are learning more about:

The challenges social landlords face when trying to provide flexibility services to energy networks.
The impact of energy‑efficiency measures and clean energy technologies on energy use within social housing.
How retrofit programmes and clean‑technology installations can be coordinated to create greater benefits across housing, energy and network sectors.
What additional support UK Power Networks can offer to help local authorities participate in flexibility markets.
What information, evidence and case studies are most effective in encouraging more organisations to provide flexibility.
How enabling social landlords to offer energy flexibility can also benefit tenants, particularly those at risk of fuel poverty.

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SNUG (Smarter Network Upgrades)

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