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Households and businesses in the UK will be paid to reduce their electricity consumption when the system is tight all year round — rather than during winter alone — according to an updated strategy published by the system operator, which aims to ease the path to a clean power system by 2030.
In response to Russia’s invasion of Ukraine and the resultant surge in gas prices, the grid operator launched the ‘demand flexibility service’ in 2022, whereby consumers and businesses are paid to voluntarily reduce or reschedule their electricity use away from peak times — when demand is highest and prices tend to climb.
Under pilot versions of the scheme, the National Energy System Operator (NESO) paid energy suppliers like Octopus Energy a minimum price of £3 per kilowatt-hour (kWh) of electricity saved. Those companies passed the savings on to participating customers, either in the form of cash, points, or prizes.
Last winter, 2.6 million homes and businesses participated, saving 3.7 gigawatt-hours of power.
NESO has now asked the regulator for permission to expand the programme.
“Once approved, NESO will be able to use the demand flexibility service throughout the year, allowing consumers and businesses to compete directly with power stations and renewables,” it said in a statement.
This “makes sense” because the system is sometimes tight in summer after the sun has set and wind output is low, says Dave Jones, global insights programme director at energy research group Ember.
“If we can reduce electricity demand by rewarding participating customers to turn down when we need them to, it means we can avoid using expensive and polluting fossil fuel generators,” NESO says. “The service could accelerate flexible energy use by many years, and will be watched with much interest by other countries.”
The UK recently shut its last coal-fired power plant for good and aims to achieve a “clean” power system by 2030. Demand flexibility is seen as one of several important tools to making this a reality.
