Yahoo Finance National Grid ready to cut energy use as temperatures plummet
Households will be paid to cut their electricity use for the first time on Monday between 5pm and 6pm, under plans being drawn up by the National Grid.
With temperatures expected to plummet to -2°C today, ramping up pressure on Britain’s supplies, the power network operator is planning to call on consumers to use less electricity to help it manage the system.
Around a million people have signed up to the scheme, which will see them paid as much as £10 a day to cut the amount of electricity they use at certain times as part of efforts to tackle the energy crisis.
This could mean, for example, not running the washing machine or dishwasher during that hour, or waiting to charge an electric car until night-time.
The scheme has previously been trialled, but proposals to use it at a time of high demand have never reached this stage of planning before. Energy sources last night said agreements linked to the plans had been made with suppliers that could not be reneged on.
In a further sign of the strain on Britain's energy supply, the National Grid has also asked extra coal-fired power plants to be ready to supply back-up electricity on Monday evening if needed.
National Grid’s Electricity System Operator (ESO) said it was activating the programme, known as the Demand Flexibility Service (DFS) between 5pm and 6pm today on Monday.
A spokesman said: “Our forecasts show electricity supply margins are expected to be tighter than normal on Monday evening.
“This does not mean electricity supplies are at risk and people should not be worried. These are precautionary measures to maintain the buffer of spare capacity we need.”
National Grid introduced the DFS service last year amid concern over power supplies this winter due to disruption to gas markets caused by Russia’s war on Ukraine, as well as outages on France’s nuclear fleet.
Ageing nuclear plants in Britain have also closed. Meanwhile, more of Britain’s electricity is also coming from the wind and the sun which are intermittent, making the system more complex to run.
The measures come as the Met Office has issued a weather warning about freezing fog on Monday. A level three cold alert will remain in place for England until Wednesday after temperatures plunged below -10C in parts of the UK last week.
Watch: What is the Demand Flexibility Service and how can I save £100 off my energy bill if I sign up?
Temperatures are expected to drop as low as -2C on Monday with very little wind, meaning there will be limited electricity from wind power and higher demand from households.
National Grid has run several tests of the DFS scheme this winter but has not so far needed to use it outside of testing.
The closest it has so far come to doing so was on November 28, when it issued a notice to the market saying it might be needed, but ultimately decided that it was not.
Technically it is possible for the call to cut supplies on Monday evening to yet be called off. However, it is understood National Grid agreed payments on Sunday with suppliers to do so, meaning this is unlikely.
A source said: "It will be the first live event for the demand flexibility scheme.
"Bids have been accepted from energy suppliers and prices agreed and that can't be reneged on.
"It is locked in for and it will be the first time it will be used for real."
Under the scheme, households who have signed up will be notified by their supplier that they can be paid to cut usage between 5pm and 6pm on Monday (Jan 23), and how much they will be paid to do so. They do not have to opt-in.
How much households can earn will depend on their supplier and how much power they would normally use, but some could earn around £10 for the session, for example.
During testing, suppliers have been paid £3 per kilowatt-hour saved, but they are likely to get more outside of testing. Some are understood to have agreed £6 per kilowatt hour for Monday evening.
They can choose whether to pass on the full amount to their customers, or even pay more. Suppliers signed up to the DFS scheme include Octopus Energy and British Gas.
It is open to households in Britain with a second generation smart meter.
The operator has also asked that three coal units - owned by Drax and EDF - would be warmed up and on standby for Monday.
The units were due to close in September 2022 as part of the push away from coal, but were last year asked to stay online longer than planned in order to provide back-up supplies if needed this winter.
On Monday morning the coal plants were stood down.
Phil Hewitt, director at energy market consultancy EnAppSys, said National Grid appeared to be taking a very cautious approach, although margins are set to be 'tight'.
One reason for the precautions could however be that "things always break on Mondays", he said as many power stations shut down over the weekend and start up again at the start of the week, he added.
A government source said: "The morning is absolutely fine in terms of demand but we are expecting it to get higher in the evening.
“Like we have done before, we are keeping our coals warm, which is the phrase for having coal-fired stations on standby. They are ready to be backed into action along with the demand flexibility scheme.
“There will come a point where it will be a go or no go decision but the plan at the moment is to use it for the evening.
"This is not about blackouts. The point is that we can always get or produce more electricity. This is about giving people more flexibility and giving the grid more flexibility."
