If you are a utility or electricity retailer, demand-side flexibility is likely already on your agenda. The harder question is: how do you actually operationalise it at scale without building every piece of infrastructure yourself?
Electrification is accelerating. EVs, heat pumps, home batteries, and smart appliances are addind more pressure to the grid. Most home energy assets are flexible assets, but only if you have the connectivity layer, the pooling logic, and the market access to turn individual devices into coordinated, dispatchable capacity.
This guide sets out the building blocks utilities need when using demand-side flexibility for VPPs or consider the role of partners like Synergi, that can support the whole process end-to-end by offering technical aggregation capabilities.
From flexibility to live VPP: what it actually takes
Demand-side flexibility is the goal. A Virtual Power Plant is the mechanism that delivers it. A VPP aggregates distributed household assets such as EVs, heat pumps, solar, and batteries, into a single, dispatchable pool that can respond to grid signals, participate in reserve markets, and generate revenue for every party in the chain. The harder question is what it actually takes to build and operate one at scale with residential assets, and connect it reliably to various live markets.
Synergi has answered that question in practice. In 2025, we launched Finland’s first EV-powered VPP by turning thousands of cloud-connected household EVs (which we previously acquired ourselves via the Synergi app) into active demand-side flexibility, traded directly in Finnish reserve markets including mFRR. No additional hardware. End-to-end, cloud-to-cloud, with optimal activation response times. The same platform that powers our VPP is now available to utilities who want to offer demand-side flexibility programmes to their own customers.
Connecting household assets without additional hardware
Individual household assets are small, typically 2 kW to 20 kW each. Adding hardware per device to enable control would make the economics unworkable. The only viable path is pure software: cloud-to-cloud integrations with OEM APIs that give the aggregator direct, real-time control over enrolled devices.
This is what Synergi built. Our platform connects directly to various smart devices through OEM cloud APIs — meaning a consumer simply downloads the Synergi app, links their device with their existing OEM credentials, and sets their control preferences. Synergi’s software handles optimisation and rewards for consumers automatically from that point on. Our VPP was also built BRP-agnostic: consumers from different electricity providers can all participate in the same pool, which is essential for reaching the minimum capacity thresholds that reserve markets require (1 MW in Finland, for example).
Meeting market requirements with residential assets
Latency requirements, bid structures, and reporting standards were built around large industrual loads— not pools of cloud-connected residential DERs. Applying those same standards to residential assets requires a different technical approach: faster communication protocols, smarter capacity forecasting (especially for assets like EVs that may or may not be plugged in), and real-time availability checks before every bid.
Synergi has qualified for and actively trades in the Finnish mFRR market with exactly this kind of residential pool. The operational learnings from running that live programme — handling activations, acquiring users, managing the user experience and support, forecasting available capacity in real time — are embedded in the platform capabilities we make available to utility partners via our External API.
EVs are the starting point. More devices are coming soon as part of our VPP offering. Each new device class expands the pool without requiring separate control systems or consumer interfaces. One platform, multiple assets, unified dispatch.
Even if you have the core aggregation and market connectivity layer sorted, if utilities want to build this in-house, they still need to attract their customers to join: how do you design the experience that makes households actually want to participate in your VPP?
Building a top-tier user experience to attract end-users
When building a VPP with residential assets, user experience is not a secondary consideration — it is what determines whether your pool scales or stalls. This is a unique challenge for the energy industry, where demand response has traditionally been designed for industrial operators, not households.
A 2017 study in Finland found that 54% of households are already willing to reduce their consumption during peak hours, but only if they retain a say in how their consumption is adjusted. The design of the consumer-facing product directly determines participation rates, and participation rates determine the commercial viability of your flexibility pool.
What is user experience in this context?
User experience encompasses all aspects of a user's interaction with a company, its services, and its products. In the energy space, you must begin by understanding household owners' existing processes and pain points before building a product that serves them effectively. Engineering, marketing, and design must all work towards a common goal: a coherent service with simple product messaging.
Particularly in energy, products often use technical terminology that caters to early adopters. But when the goal is to bring all households into flexibility markets, you need to think mass-market. Here are three UX principles validated with over 15,000 European homes through Synergi app:
- Simplicity
Energy solutions have never been known for their simplicity, and often, home energy management systems need to be simpler for average households to understand or know how they work. What does simplicity mean in practice? To name a few, avoid unnecessary steps in the service onboarding, which only add to the user's cognitive load. For example, the Synergi app takes only a few clicks to create an account, link a device, and set up optimisation preferences without the need of hardware installations. Synergi only asks for the information needed to set up the service, nothing else! We want to keep the customation settings for users at minimum since the biggest benefit in our service is monetary savings trough smart automations. Focus in easy setup and let automations take care of the rest.
- Transparency
Transparency is crucial for the smart automation of household devices. Because users are partly letting away control of their devices, energy management apps should accurately describe what is happening and why. This can be achieved in many ways, from showing the impact of the service by visualising the benefits with data and graphs to showing real-time updates of what’s happening in the service, whether it is scheduled charging, offering flexibility to the reserve markets, or something else. Transparency can also be achieved through clear communication with users via customer support, especially when something has gone wrong, for example, charging didn’t work. In these cases, it is even more crucial to be granular about what happened than in situations where things have gone well.
- Understandability
Most consumers find energy and climate change-related concepts difficult to understand. So, when building energy products or services, the goal is to make them as understandable as possible. With excellent communication, one can easily communicate with end-users: 1) what is happening, 2) how it affects you, and 3) what’s in it for you.
Consumer-friendly terminology is crucial. Most consumers don’t know about flexibility or reserve markets. Still, we believe that they will respond to familiar concepts such as “rewards for using electricity when it makes sense” or “get paid for turning off the dishwasher.” Using concepts that users already understand is another way of making sure you communicate understandably. For example, when Google Nest launched its “Rush hour rewards,” it helped consumers understand the concept by associating it with traffic. If there is a “rush” in the electricity system, you earn rewards by not using electricity so much. Synergi Smart Rewards follows a similar pattern, where users simply use smart charging to fulfil their charging needs while saving on costs and earning rewards for supporting the grid.
Creating a win-win arena for flexibility players
Demand-side flexibility will be needed in increasing volumes as variable renewable energy deepens its share of power systems. Building demand-side flexibility programmes is critical to meeting the EU's green transition targets. Research indicates that scaling demand-side flexibility technology across the EU and UK could save 40 million tonnes of carbon emissions annually by 2030. Annual household savings from demand response participation could reach seven percent off electricity bills.
To make those numbers real, you need a clear-eyed understanding of what flexibility means for each stakeholder — and what conditions make participation worthwhile for all of them.
What are the stakeholders in demand-side flexibility?
The concept of flexibility in electricity consumption transforms how power is managed and distributed. Key players in this system include households, utility companies, transmission system operators (TSOs), and aggregators, each playing a crucial role in maintaining power grid stability and optimising energy usage. Let's begin by giving a very concrete description of what flexibility means for different stakeholders and what is expected from them.
Households:
- Households contribute to the system’s flexibility by owning and operating distributed energy resources like electric vehicles, heat pumps, water boilers, or home batteries. These resources can be controlled and aggregated to adjust consumption patterns dynamically. In practice, households agree to momentarily increase of decrease their energy use, thus enabling their DERs to be flexibly managed.
Utility Companies /Electricity providers:
- Utility companies maintain a relationship with households by selling electricity contracts at pre-agreed prices. Often, they also act as Balance Responsible Parties (BRPs), entities responsible for ensuring the balance of electricity across one or more access points to the transmission grid. They must be aware of what happens in the portfolio of customers. Hence, informing all stakeholders when bringing households to flexible markets is essential.
Transmission System Operator
- TSOs, such as Fingrid in Finland, are pivotal in purchasing flexibility from electricity markets to balance the grid. In times of insufficient electricity production, TSOs ensure grid stability by compensating companies or aggregators for providing flexibility and for specific activations, like reducing household consumption for short periods.
Aggregators:
- Aggregators, like Synergi, combine multiple flexible assets into a single, manageable entity that can participate in reserve markets. For example, and individual EV driver cannot enter flexibility markets alone due to low consumption levels. However, by aggregating the power of 150 drivers, aggregators can meet the minimum capacity requirements for balancing markets. The aggregator controls the loads, makes the bids, and ensures all stakeholders are informed about what is happening. However, Synergi's technical aggregation capabilities enable utility companies to use similar capabiilities to aggregate and trade residential flexibility themselves.
Creating a win-win situation for all
Building the right arena for effective participation in demand-side flexibility depends on crucial factors: communication, technical capabilities, and revenue-share. Let’s unpack them all:
- Transparent and proactive communications
Clear and proactive communication keeps all stakeholders informed and aligned. Households need timely updates when their consumption is being adjusted. Utility companies must know the capacity being offered to reserve markets, the activation times, and the extent of those activations. TSOs require precise information on aggregator bids to maintain grid stability. Synergi's platform provides real-time reporting across all three layers.
- Technical capabilities
High-quality technical capabilities are essential for accurate and efficient operations. Aggregators must ensure their capacity bids are calculated correctly and never offering capacity they cannot control. When an activation occurs, assets must react within seconds in some markets. Swift, reliable response prevents penalties and protects the reputation of the VPP. This is core infrastructure, not a feature.
- Fair and just revenue-share
Equitable compensation is what incentivises all participants to stay engaged. A fair revenue-sharing model ensures each party is properly rewarded for their contribution to the flexibility market. This is the key to scaling participation and achieving widespread engagement over the long term.
Launch your VPP with Synergi — proven infrastructure, not a pilot
Synergi has already built, operated, and optimised the infrastructure described in this guide — BRP-agnostic pooling, hardware-free device connectivity, real-time market bidding, and a consumer experience that drives sustained participation. Building this from scratch typically takes years and carries significant technical risk. Deploying it through Synergi takes weeks. Our platform is 5x more cost-efficient than building in-house, and virtually risk-free: you learn the ins and outs of activating residential and C&I loads alongside a partner that has already proven the approach in a live reserve market. Boook a demo below:
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