Britain’s backbone power operator is reportedly pondering paying domestic users to dial down demand at peak hours this winter, in a bid to stave off blackouts.
Millions of homes equipped with time-sensitive smart meters could be offered as much as 600 pence per kWh foregone, if the National Grid ESO can prove to retailers, Ofgem and ministers that extending paid-for load-shifting to homes as well as commercial users will result in lower household bills.
These are anticipated to rocket for a second time this year. October’s scheduled raising of the retail price cap is likely to add another £800 to Ofgem’s £1,971 home energy benchmark, which took effect in April.
As reported in The Times this morning, National Grid’s early calculations foresee domestic accounts equipped with smart meters being paid as much as 600 pence per kilowatt hour to cook, charge vehicles, or run storage heaters at times other than winter evenings. Capped tariffs for retail users by that time are likely to be around 28 pence/ kWh.
Earlier this year around 100,000 Octopus Energy customers trialled load-shifting in collaboration with the Grid. Last week National Grid ESO wrote to licenced suppliers, asking them urgently to assess how many home users could be persuaded to adopt paid-for load shifting.
Given 24 hours’ notice, Octopus households in the experiment were told to cut power usage during a specified two hour window, including the teatime peak between 4.30pm and 6.30pm.
The supplier calculates households saved 23p on average per period. Heavy users saved up to £4.35.
“We’d rather give customers discounts if they use less power at these times, rather than swelling bills to pay polluters.” Greg Jackson, Octopus Energy co-founder told The Times.
More than 20 million homes – or over 90% of Britain’s domestic accounts – are now equipped with either first or second generation SMTS meters, overseeing authority the Data Communications Company reported last month. Lockdowns notwithstanding, that installed base doubled since December 2020.
The ESO’s worst-case scenarios include at least some rolling black-outs this winter. Amid soaring gas prices, D-BEIS has requested owners of declining coal plants at West Burton A, Ratcliffe-on-Stour and reportedly Drax to have them taken out of or moth-balls, ready to pick up slack.
Per today’s report, the costs of load-shifting proposed scheme would be levied on household bills. The ESO National Grid believes both it and all the nation’s households will benefit, if rewards for demand-trimming households reducing are less lower than its costs in paying generating firms for an equivalent increase in supply.
A spokeswoman for National Grid ESO told The Times: “Demand shifting has the potential to save consumers money, reduce carbon emissions and offer greater flexibility on the system.”