Ofgem’s approval on Friday means that today sees a repeat of cash incentives offered to businesses and homes shifting electricity loads outside peak times.
National Grid signalled an update of its Demand Flexibility Service (DFS), available now. Octopus was the first operator to announce terms of its own deal for customers.
The grid’s DFS first launched last winter, attracting 1.6 million households and businesses to take part. An estimated 3.3GMWh of electricity was moved off congested grids, over 22 periods embracing their busiest hours.
DFS incentivises households with smart meters, as well as industrial and commercial users, to voluntarily flex the time they use their electricity to help manage the system when margins are tightest.
End-consumers interested in participating in the service can do so through a number of parties. Last time out a total of 31 service providers, not all of them direct retailers, registered as aggregators of demand.
Starting this week NG-ESO has identified 12 test events, and seeks more participants. Size or the value of their quarterly bill doesn’t matter, says the backbone operator.
A guaranteed acceptance price of £3 per kWh for at least six of the test events is the prize value from the NG-ESO to power retailers, aggregators and businesses who directly contract with it.
The tests begin in November. Further details on market reaction to them performed will revealed at a future date.
In its Winter Outlook for 2023/24, NG-ESO noted improvements in the broad European energy situation since 2022, with recovering margins forecast to be broadly in line with recent winters. If needed, the DFS ‘live events’ will incentivise customers to reduce electricity consumption at periods when margins are tightest.
The ESO’s head of markets Claire Dykta said: “We are delighted that Ofgem has formally approved the return of our Demand Flexibility Service this winter. Households and businesses across Great Britain can now benefit from actively participating in helping balance the network during tight winter periods and be incentivised to do so.
“The service compliments the robust set of tools the ESO already uses to balance the electricity system every day.”
Seven hundred thousand customers of Octopus, Britain’s second-biggest retailer, participated last winter. It says three million clients with smart meters are eligible this year.
It will contact registered participants up to 24 hours in advance of flex periods, which it brands ‘Saving Sessions’. There customers can earn ‘Octopoints’ by reducing energy demand, redeemable against bills. The points total allocated will vary. Bonuses will be on offer again for customers who take part in more than one session in a row.
At shorter notice – up to two hours in advance – Octopus will use new WhatsApp alerts to publicise ‘Surprise Sessions’, shorter events providing higher rewards.
The supplier’s flexibility chief Alex Schoch enthused: “We’re very excited to have even more ways for customers to earn through ‘Surprise Sessions’ and we’re aiming for lots more savvy customers to sign up this year.
“By using less electricity during peak times, our ‘Saving Sessions’ participants saved everyone money in system costs, and speeded us towards a green grid free from dirty fossil fuels.”