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National Grid to pay customers to cut energy usage this winter

Nick Cheek
Written By:
Nick Cheek

National Grid plans to bring back its ‘Demand Flexibility Service’ next winter. The scheme will pay customers for saving electricity at peak times.

The Demand Flexibility Service which provides additional tools for managing the national electricity network while helping customers to reduce energy bills, is to return this winter.

The UK electricity system operator ESO has confirmed that the service will be back subject to the approval of the energy regulator Ofgem.

Under the Demand Flexibility Service (DFS), customers are paid to switch off their energy at peak times with the aim of avoiding power blackouts. The National Grid tells energy suppliers when they can trigger the DFS and suppliers then contact customers asking them if they want to take part.

Its early view of this winter is that electricity system margins are set to be slightly higher compared to last year. But ESO has vowed that it will continue to build further resilience against the increased margins.

As part of the plan ESO has confirmed details on the Demand Flexibility Service’s commercial proposition for electricity suppliers, aggregators and businesses who directly contract with them.

This is so that providers can begin to prepare their offerings ahead of regulatory approval, to enable their customers, whether households or businesses, to sign up to the plan later in the year.

Customers can earn range of benefits

The service is there to enable consumers, households, and businesses to directly benefit from reducing or shifting their electricity use at key times or specified periods. Participants will be able to earn pounds, points and prizes over the winter period and reduce energy bills.

Research compiled by the Centre for Sustainable Energy on behalf of ESO,  found that 89% of respondents were satisfied with their experience of last winter’s scheme. Also 83% said that they would participate again of they were offered a similar scheme.

The data also showed that those households who were struggling against the headwinds of higher energy bills, were more motivated to accumulate financial rewards compared to those who were more comfortable.

Recently, Ofgem reduced the energy price cap, which limits the maximum amount that a supplier can charge per unit of energy consumed, to £1,923 a year from 1 October.

Jake Rigg, the corporate affairs director of  ESO said: “The ESO will be reintroducing the Demand Flexibility Service for this winter and is keen for more consumers to get involved. We want to work with industry to build on the past success of this new and innovative service.

“Across last winter, the Demand Flexibility Service successfully demonstrated the interest of consumers and businesses in playing a more active role in balancing our electricity needs and to be rewarded with savings for their action in the process.”