The UK National Grid will pay households to shift their electricity use to certain times to avoid blackouts.
The new scheme will encourage customers with smart meters to use less energy at peak times and reduce their carbon emissions.
But how does it work, and how successful has it been?
Demand Shifting Pilot
During a pilot of the scheme, customers were given 24-hours notice to cut their consumption during periods of high use. Most commonly this would be between 4:30pm and 6:30pm, when demands is highest.
The National Grid hopes to reduce the risk of blackouts this winter by paying customers to use less energy during peak times. The electricity network operator is pushing through the scheme as fast as possible to enable households with smart meters to choose to cut how much energy they use when supply is low.
The initial proposals have been drawn up by National Grid’s electricity system operator who say that UK households could be paid up to £6 per kilowatt hour in credit instead of shelling out 28.34p per kilowatt hour. This move comes as the government looks for additional ways to secure further energy supplies for this Winter and lower customer usage.
Kwasi Kwarteng harbours hopes to broker further deals to extend the life of Britain’s final coal-powered stations through the winter. This is seen as controversial by some. This follows on from Russia’s invasion of Ukraine, which has put further strain on already stretched energy supplies. To such an extent that ministers are worried about the possibility of rolling blackouts this Winter.
So, National Grid’s plans are a welcome proposal that could offer cheaper and greener alternatives to fossil fuels while cutting bills. Sorely needed as annual bills in the UK have rocketed to £1,971 already, and are expected to reach around £3000 by January.
The proposals follow a trial run in conjunction with Octopus Energy where 100,000 customers were given a day’s notice to cut their consumption during peak times. Octopus have said that the average household saved 23p in each two-hour period, with some saving up to £4.35.
Some close to the scheme have said that consumers have regularly followed the advice to cut their usage during the suggested periods. There were initial fears that National Grid would not be able to rely on consumers taking up the offer. National Grid have since asked other suppliers to assess how much customers could cut back on their consumption during peak hours.
It is a further hope of the scheme that it may encourage more households to obtain smart meters after the wide-scale rollout has faltered over the past decade.
How will demand shifting be paid for?
The Demand Shifting scheme will be paid for by a levy on household bills, however, the cost to pay power plants to maintain or increase supplies is thought to be greater.
An ESO spokesperson said –
“Demand shifting has the potential to save consumers money, reduce carbon emissions and offer greater flexibility on the system, and some forms of demand management are already used today to help balance the system… Innovation that drives consumers’ value and reduces carbon emissions will always be deployed as swiftly as possible, in a tested, safe and reliable way.”
Greg Jackson, the chief executive of Octopus Energy, said –
“National Grid has traditionally paid diesel generators huge sums at times of high demand – or paid big companies to turn down their usage… Opening this up to households who want to do so means that it won’t just be big companies who benefit. And the more of this flexibility we have on the grid, the cheaper power will be for everyone – not just those who participate.”
Customer Billing – Will I Be Affected?
As already mentioned, energy costs are spiralling – and the price rises are affecting all of us. For UK energy customers it is difficult to say how your bills will be affected due to the serious volatility in the energy markets. It is important to remember that energy prices as a whole are rising, and this will be passed onto consumers through energy bills, making it something to keep a close eye on.
Different suppliers will feel the pinch in different ways so it is crucial to be aware of the current situation your energy supplier finds themselves in. It is possible to view up to date supplier profiles with any recent changes for all of the energy suppliers in the UK, here.
At a time where bills look set to rise due to market volatility, it is also a good idea to ensure that you are not being overcharged for any of your utilities. It can be a tricky task to navigate but there are free online tools to remove the hassle available.
You can find a free online Gas Bill Calculator to see if you are being overcharged, here.
You can find a free online Electricity Bill Calculator to see if you are being overcharged, here.
Energy Solutions by Us, for You
At a time of great uncertainty in global energy markets, it is easy to feel lost in it all.
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