Get used to cutting power in push for net zero, says Grid
Electricity operator to pay households to use less electricity at peak times for a second day in a row
HOUSEHOLDS are to routinely be asked to use less electricity at peak times as part of the shift to net zero, National Grid and Ofgem officials have suggested.
Families will today be paid to cut electricity usage at teatime for a second day in a row as a cold snap forces the Grid to activate emergency measures to manage supply and demand.
While the so-called demand flexibility service was set up as an extraordinary response to Russia’s invasion of Ukraine, which triggered upheaval in the gas market, Britain’s electricity network operator and the chief of regulator Ofgem suggested the scheme or others like it would not be abandoned even as prices begin to normalise.
Jonathan Brearley, chief executive of industry regulator Ofgem, said in a speech yesterday: “In the longer term, retailers will need to play a more fundamental role in decarbonisation and in the energy transition.
“They will be on the front line of persuading customers to install the equipment needed to vary our energy usage where possible to match with times when demand is low and/or supply is high.”
Craig Dyke, head of national control at National Grid, said it “strongly believes” in a long-term shift towards flexible energy usage, which typically involves people being incentivised to use less at peak times.
He told the BBC: “As we take that step whereby people are far more engaged in the energy they use, and as we drive towards that net-zero position with people moving to electric vehicles and taking up heat pumps, consumer engagement around this is key.
“It provides that additional flexibility – not just for the system, but for all consumers.”
National Grid spent around £1.3m last night to encourage households to cut electricity usage between 5pm and 6pm, after forecasts on Sunday suggested there would be low generation from wind and high demand.
Those who have agreed to take part in the demand flexibility service will again be offered payments today between 4.30pm and 6pm. National Grid has activated the programme for a second day in a row in an effort to help keep the lights on amid forecasts of a cold, still day. National Grid has also instructed three coal-fired units to be ready to supply back-up power this afternoon if needed.
Coal plants had been warmed up on Sunday to provide back-up supplies yesterday but were stood-down overnight after initial forecasts turned out to be too pessimistic.
The coal units were due to shut in September 2022 as part of the push to phase out the fuel, but have been asked to stay online this winter in case needed. They have not yet been used.
This week marks the first use of the National Grid’s new demand flexibility service outside of test runs. More than a million households have voluntarily signed to be paid to cut their usage at times when supplies are tight.
Under the scheme, National Grid pays household energy suppliers to reduce demand and they can choose how much
‘Use of these additional services is not an indication that electricity supplies are at risk’
to pass on to their customers. Some suppliers were paid as much as £6 per kilowatt-hour for cuts yesterday evening, twice the amount as during testing.
A National Grid spokesman said: “We have taken this decision as we currently see a similar operational picture to the one available on Sunday. The use of these additional services is not an indication that electricity supplies are at risk, but that we require greater options to manage the network as normal.”
In a sign of the looming surge in electricity demand, Redrow yesterday became the first major housebuilder to say it would install heat pumps as standard.
The FTSE 250 housebuilder, which completes more than 5,000 homes a year, began installing heat pumps in its new developments this month.
All its new detached houses built will be heated by heat pumps, which draw warmth from the outside air and run on electricity.
Speaking at the Institute for Government, Ofgem’s Mr Brearley said it was possible that the price cap on energy bills, which determines what suppliers can charge their customers, may fall below £3,000 per year in April, compared with £4,279 per year now.
Mild weather has helped bring gas prices down after a scramble to refill stocks ahead of winter with less supply from Russia.