Energy bills: 'Possibility' of 'blackouts this winter' says Halligan
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While Britain only got four percent of its gas from Russia last year, Vladimir Putin’s gas cuts to Europe and his war in Ukraine have sent prices soaring, putting pressure on supplies. And as winter fast approaches with demand set to soar, there are real fears of shortages this winter as Britain scrambles to avert blackouts. And much of the UK’s electricity is generated by burning gas.
Amid concerns of supply scarcity, National Grid ESO, the electricity system operator, had proposed a plan to reward millions of consumers with smart meters for conserving energy when electricity supplies are tight.
But the plan, which would involve paying households to use less electricity at peak times, could reportedly fail as the proposed payments could be too low to incentivise people to sign up to the scheme, according to Eon and Octopus Energy.
The scheme was set to be introduced through a number of test events with customers of the suppliers taking part in November and December.
It involves suppliers submitting the price they think their customers should be paid to take part.
National Grid told suppliers at a briefing last week it may not include companies asking for payments for their customers of more than 52p for each kilowatt-hour 9 (KWh) of electricity they do not use.
This is the unit rate households would have been charged for using electricity if Ofgem’s planned £3,549 October price cap came into effect.
But Prime Minister Liz Truss announced last week that energy bills will be frozen at £2,500 as part of a huge support package unveiled in the House of Commons as one of her first acts in charge of the country.
Octopus Energy has argued that National Grid needs to offer a “much higher price” for customers to get on board with the scheme.
Eon, the UK’s second biggest supplier, agreed, and says that “the price is “not high enough to incentivise customers to take part”. The company argues that payments should be £2 per kWh at a minimum.
A spokesman for National Grid ESO said: “The ESO is currently conducting an industry consultation to define the scope and terms of a demand flexibility service for this winter.”
The spokesperson added that National Grid ESO would provide an update on the “finalised service term” once completed.
This comes after the National Grid warned back in July that there could be “tight” periods of electricity supply in early December as a result of Putin’s gas cuts.
It said: “There are risks and uncertainties this winter as a direct result of possible shortfalls in Europe’s gas supply.”
The UK also imports its electricity via cables connected to neighbouring countries, with most of its energy coming from Norway, France and Belgium.
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And back in July, National Grid had to pay £9 per kWh to import power from Belgium to swerve blackouts in London.
The company has also said that it is working with the Government to keep coal stations in reserve for winter energy supplies.
National Grid said: “We expect there to be sufficiently available to meet demand.”
The firm is also prepared for a “worst-case scenario’ where Britain’s power shortfall meets about a sixth of peak demand. The emergency plan would involve power being cut to businesses and even homes due to gas supplies used to generate electricity being halted, according to insiders.
This could involve up to four days of power cuts and blackouts in January, as part of a winter contingency plan.
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