Households with smart meters could earn hundreds of pounds by using less electricity at peak times this winter as part of efforts to avoid blackouts.
National Grid, the company responsible for keeping the lights on, is starting a scheme that pays householders if they shift energy-intensive activities, such as using the washing machine, to when demand is low. Some could earn about £10 for each day they participate.
The company said that if Britain were unable to import electricity from the continent, it may need to run the scheme for between ten and 35 days.
In a worst-case scenario, in which Britain has insufficient gas for its gas power plants, the scheme could last 49 days. Even if the scheme is not used to prevent blackouts, households that sign up will get paid in the form of credits provided through their energy supplier for taking part in tests. National Grid said it would pay at least £3 per kilowatt-hour of electricity avoided during these tests.
It had proposed 52p/kWh but suppliers said bigger incentives were needed. The scheme is due to begin next month, with up to 12 one-hour tests over the winter months.
National Grid said a typical household shifting their use of domestic appliances could be paid at least £3 during each test, or up to £36 over the winter. Households that change the time at which electric vehicles are charged could be paid £21 for each test, or up to £252 over the winter.
Much bigger savings are possible if National Grid is forced to use the scheme. It said it was most likely to do so for periods of between one and three hours on weekdays.
This would “typically” occur “during the evening period between 4pm-9pm”, though it could also happen in the morning. If the scheme is used, the price for each kilowatt-hour saved will vary depending on how desperate National Grid is to reduce demand. There will be no minimum or maximum price.
National Grid said it believed it should take “every available commercial and market action” to avoid controlled power cuts. Rolling blackouts would be “a last resort emergency measure”, the company added.
National Grid warned this month that if Britain could not secure enough gas for its power plants this winter it could face rolling three-hour blackouts, most likely between 4pm and 7pm when demand peaks as people return home from work and turn on washing machines, dishwashers and ovens.
Households will only be able to take part in the scheme if they have a smart meter that tracks their power usage. Their supplier must also have signed up. Octopus Energy, Britain’s fourth-biggest supplier, has indicated it plans to take part, but most other suppliers are not expected to get involved immediately, and some not at all. This will deny some households the chance to make savings. A failure by suppliers to sign up would also cast doubt on whether the scheme can be effective.
British Gas, Britain’s biggest supplier, is planning to begin trials this year. Shell Energy said it was unlikely to take part this winter.
National Grid hopes to sign up households and businesses that could deliver 2 gigawatts of demand reduction — the equivalent of the total peak power demand of 600,000 homes. It has also struck contracts that will enable it to fire up 2 gigawatts of old coal plants as back-up in an emergency. But it may need much more than this to avoid blackouts in some scenarios.
