The National Grid has launched a scheme that will see energy customers paid to save electricity at key times this winter. The money-saving initiative is part of plans being put in place to help avoid blackouts in the UK amid energy supply concerns.
The National Grid Electricity System Operator (ESO) launched the Demand Flexibility Service (DFS) at the start of November. So far, a number of test trials have been held during which customers could earn money by reducing their usage over a set period of time.
A live run of the service is yet to be held. The ESO issued an update on Monday to say it could be run on Tuesday this week. However, it was eventually decided that the service would not be triggered.
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Octopus Energy, one of the bigger firms to sign up to the scheme, has already held two tests with its customers and said the majority of customers earned "well over" £1 over just an hour.
Although the risk is still small, the chance of Britain facing rolling blackouts is higher this winter than it has been for decades. The National Grid hopes that by having the ability to ask people to reduce usage – and to pay them to do so – it can reduce the risk of blackouts happening.
But how does the scheme work and who can take part? Here's everything you need to know.
Who can take part in the scheme?
In order to take part, you need to be with an energy provider that offers the scheme, and you need to have a smart meter installed. Your energy supplier should contact you about the scheme and ask whether you want to be involved. If you do, you will be asked to sign up.
You can see a full list of all of the energy providers that are participating in the scheme here. So far, around 25 providers are part of the scheme including Octopus Energy, OVO Energy, E.ON Next and British Gas.
How does it work?
If you have signed up to take part in the DFS scheme your electricity provider will contact you the day before a demonstration test or a live event and ask if you want to participate in it.
During the event, you will be asked to reduce your electricity consumption. You could do this by opting not to use power-hungry appliances - such as washing machines, clothes dryers, dishwashers and electric showers - for the duration of the event. You could also make energy-saving swaps, such as by cooking with your microwave rather than your oven.
If you manage to reduce your consumption you will be rewarded by your energy provider. It is up to each provider to decide what individual incentives they will offer. Some may offer money off your next electricity bill, while others may offer rewards in the form of vouchers.
If you don't manage to save energy during this time, you will not be penalised. You can try again next time.
If you sign up to DFS you will need to authorise your provider to access your smart meter. This is so that they can read your data and accurately work out how much energy you are saving at the time.
When will the events take place?
The ESO has said that it will run up to four demonstration tests with each provider signed up in the first month, followed by two tests in each subsequent month. That means there will be a maximum of 12 tests to take part in.
Demonstration tests will run for one hour.
There will then also be live events, which will be triggered when the ESO decides that it is necessary to try and reduce consumption nationally. These live events could run for between three and four hours, according to the ESO. Live events will most likely be held late in the afternoon or early in the evening on weekdays when demand for electricity is highest.
The service is expected to run until March 2023.
How much could you earn?
According to the ESO, a typical household could potentially save around £100 over winter if they participate in each demonstration test offered.
Octopus Energy has run two tests with its customers so far, and claimed that some households earned more than £4 for taking part over the course of an hour. The energy supplier released data showing that its customers had helped reduce demand by more than 100 megawatts during both tests. That is the same amount of electricity that a small power plant produces.
The founder of the firm said the savings were similar to Tesco Clubcard points, which build up over time. Hitting back at criticism from some customers who said they were expecting bigger savings, Greg Jackson said: "Whilst some saved 8p, or nothing - others saved £££. It's like Clubcard points. And it's far better than paying standby diesel generators, or in the worst case actual blackouts. It makes the system cheaper (and cleaner) for everyone."
Different energy suppliers have different ways of rewarding customers taking part in the scheme. Customers with Octopus can either have the amount they earn taken off their energy bill, or they can take it out as cash.
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