Electricity customers offered discounts to cut peak-time use
Image credit: Mike Taylor/Dreamstime
Ofgem has approved proposals that will allow National Grid ESO to pay businesses and the public for reducing or moving their electricity use outside of peak hours in a bid to stabilise Britain's energy grid at times of high gas prices.
The launch of the electricity system operator's Demand Flexibility Service, which will run until 31 March 2023, means a typical household could save approximately £100 through the limited scheme while industrial and commercial businesses with larger energy usage could save multiples of this.
Electricity suppliers and providers can join the service and work with their customers in an effort to boost engagement and participation.
In the coming days the ESO will look to run the first demonstration events for this service, with those providers that have ensured they are ready and able to participate from the first day of this service.
Ofgem, which is the Britain's energy regulator, said that these demonstration events will include a guaranteed acceptance price for the providers that participate, set at £3,000/MWh (£3/kWh).
There will be a total of 12 test days to see how customers respond, but only those with smart meters will be able to take part.
Households participating through the programme will be sent a message from the network if there is increased pressure on the system, asking them to reduce their usage.
Concerns have been raised by National Grid ESO that high gas prices following Russia’s invasion of Ukraine could see the UK facing a “challenging winter” with regards to its energy supplies.
It has even raised the possibility of planned three-hour electricity blackouts that would see supplies cut off at peak times in order to ensure the grid does not collapse.
But government minister Nadhim Zahawi has said that the possibility of this is “extremely unlikely” and that plans were needed “for every scenario”.
Fintan Slye, executive director of National Grid 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 complement the robust set of tools we already use to balance the electricity system every day.”
Last month, National Grid began trialling new technology designed to improve the capacity of existing power lines in order to allow for the integration of more renewable energy.
‘Dynamic Line Rating’ (DLR) technology uses sensors and a data analytics platform to highlight available spare capacity on overhead power lines when available.
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