National Grid to pay households to use less electricity

National Grid File photo dated 08/04/19 of a handheld smart meter in a London home. Householders are experiencing plummeting standards of customer service from their energy suppliers including rising call waiting times as their bills soar, according to Citizens Advice figures. Issue date: Friday April 8, 2022.
Households in England, Scotland and Wales with a smart meter are eligible for the National Grid scheme. Photo: Getty

UK households will be paid to cut their electricity use for the first time this Monday between 5pm and 6pm.

The National Grid ESO (electricity system operator) is, for the first time, activating the "demand flexibility service (DFS)" ⁠— which allows it to access additional flexibility when national demand is at its highest during peak winter days.

Around a million people have signed up to the scheme, which will see them paid as much as £10 a day to cut the amount of electricity they use at certain times as part of efforts to tackle the energy crisis.

Those who have signed up will get discounts on their bills if they do things like delay using their oven or washing machine.

The scheme reportedly compares usage against a customer's usual demand and pays around £3 for every unit or kilowatt hour (kWh) saved. It's thought it could save households up to £100 over the winter.

Customers of Octopus Energy are among those who can expect higher-than-usual payouts.

The supplier said that all customers who take part can expect to be handed £3.37 worth of points per unit of electricity they save, 50% higher than past payments.

Several other suppliers have also bid for higher contracts than usual, meaning they could be paying their customers more to take part.

Octopus said that customers with a functioning smart meter can sign up at any point before the session starts at 5pm on Monday.

Read more: Daily blackouts could hit UK this winter, warns National Grid

Only households with a smart meter are eligible and consumers need to sign up through their supplier.

There are 26 energy suppliers signed up to the scheme, including British Gas (CNA.L), Octopus Energy and EDF (EDF.PA).

Households can check with their supplier directly if it is running the scheme and how to take part. Not all are taking part.

Some may have already signed up the required number of customers while others are inviting them directly.

An ESO spokesperson said: "We are also activating a Live Demand Flexibility Service event between 5-6pm.

"This does not mean electricity supplies are at risk and people should not be worried. These are precautionary measures to maintain the buffer of spare capacity we need.”

Read more: UK households to be paid to reduce energy use during peak times to avoid blackouts

In a series of tests to prepare for Monday night, the National Grid has paid out more than £3m to homes that conserve electricity during busy hours.

National Grid’s electricity system team has said it could pay households to slash their electricity use again on Tuesday in what would be the second live-run of its Demand Flexibility Service.

The Electricity System Operator said on Monday that it was looking for bids from suppliers to help save up to 341 megawatts (MW) of power between 4.30pm and 6pm on Tuesday.

The plan, which could still be abandoned if conditions improve, would help the grid balance supply and demand by paying people to reduce the amount of electricity they use.

Martyn Allen, technical director of Electrical Safety First, said: “Households will understandably be considering all their options during a financially challenging time, yet it is essential that anyone considering using appliances at night do all they can to mitigate their risk of a fire with a few simple spot checks.

"Ensure your appliances are not subject to a recall, that cables are not damaged and that filters are regularly emptied to reduce a build up of lint. Finally, ensure you have a working smoke alarm on every floor in your house, it could save your life.”

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Meanwhile, Britain is firing up three coal power generators ready for use on Monday as a prolonged cold snap grips the country.

The National Grid said the three generators ⁠— two at Drax's site in North Yorkshire and one at West Burton in Lincolnshire ⁠— will not necessarily be needed.

But it has asked them to be warmed up and ready to run if required.

Read more: Energy bills: How to cope with soaring prices

National Grid ESO added that its announcement should not be interpreted as a sign that electricity supplies are at risk and said "people should not be worried".

"These are precautionary measures to maintain the buffer of spare capacity we need," National Grid said.

Watch: Cold snap forces National Grid to put three coal power generators on standby