Alison Hammond discusses potential blackouts
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The National Grid has unveiled the full details of the demand flexibility service, which is a new scheme that will pay households to reduce their electricity usage during peak hours of the day. This service, which was approved by the energy regulator Ofgem to run until March 31 next year, was introduced in a bit to prevent a scenario where the grid is forced to impose three-hour blackouts in the UK, if it fails to secure enough gas and electricity supplies. This new demand flexibility service, which offer discounts to households with smart meters, if they lower their energy usage during peak hours where demand is the highest.
How to save £100 on energy bills
The National Grid Electricity System Operator (ESO) said this scheme would allow a typical household to save £100 this winter, using their energy-intensive appliances like washing machines at non-peak hours.
Peak hours refer to times of the day when electricity use is at its highest. Typically this is around 4pm to 7pm when people come home from work and school.
During these times, the National Grid needs to secure enormous amounts of power, which means it has to rely on a lot of natural gas to generate electricity or import it from overseas.
Some of the UK’s largest energy supplies, including British Gas, Octopus Energy, SSE, and E.ON confirmed to Express.co.uk they are going to participate in this scheme.
How will the Demand Flexibility Scheme work?
Within the coming days, the Demand Flexibility Scheme will be tested. Households who have signed up to the scheme will be sent a message, asking them to reduce their energy usage or shift when they use electricity at peak hours on a particular day.
This could mean Britons who are participating will have to avoid using power-hungry appliances – for example, the washing machine or tumble dryer – during a specified time.
Households may choose to lower their energy use in other ways, such as cooking in the microwave rather than the oven.
For each supplier who has signed up, there will be 12 initial test days, which will be for a one-hour period between 4pm and 7pm. If successful, the service who be rolled out for a longer period of time after the initial days.
While the National Grid will pay energy suppliers £3 for every kilowatt hour (kWh) during the test periods, the companies can choose not to pass on the full amount, or even to pay more.
Fintan Slye, Executive Director of the ESO, said: “We are delighted that Ofgem have approved the use of our Demand Flexibility Service this winter.
“It will help mitigate the potential risks that the ESO has outlined in its Winter Outlook and will allow consumers to see a financial return for reducing their electricity use at peak times.
“As a responsible operator of the electricity system we have developed this innovative Demand Flexibility Service to compliment the robust set of tools we already use to balance the electricity system every day.”
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The National Grid estimates that with enough participation, this scheme would free up a further 2 GW of electricity, which is enough to power about 600,000 homes in the UK.
Which energy suppliers are taking part?
Octopus Energy, who piloted the National Grid scheme earlier this year, was the first supplier to officially sign up to the new initiative, and is expected to pay customers an average £4 during peak times as part of its Saving Sessions service.
British Gas has announced that households will have to reduce their electricity use by around 30 percent between 4pm and 7pm.
E.On Next said it has started writing to its customers this week, inviting them to sign up for the scheme. They estimated that households would be paid about £3 per kWh, which would be given in credit to their energy account.
OVO Energy, which owns SSE, has announced a similar scheme, although this is separate to National Grid’s plan. OVO customers are set to receive £20 each month if they cut their energy usage by 12.5 percent between 4pm and 7pm.
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