Thousands of homes could soon be paid to halve their electricity usage for a couple of hours daily when the UK’s power demand is high under a new scheme to help reduce energy bills and create a zero carbon power supply system.
From next week the trial by Octopus Energy and National Grid’s electricity system operator will offer the household supplier’s customers the chance to earn money by cutting their power use by between 40% and 60% below normal levels during a set two-hour period.
They could be asked to delay a laundry cycle or a dishwasher load when demand on the UK’s power grid typically climbs, such as between 9am and 11am and again between 4.30pm and 6.30pm. If they meet their electricity reduction targets they could earn up to 35p for every kilowatt-hour of electricity saved.
Households will be told about each two-hour trial window by 4pm the day before it is scheduled, so they can choose in advance whether to opt-in or not. Octopus Energy is poised to invite 1.4m of its customers with an installed smart meter to take part from Friday this week, and expects about 100,000 homes to sign up for the trial which runs until the end of March.
The trial could be a welcome opportunity for eligible households after the energy regulator warned that the cap on energy tariffs would soar by almost £700 from April to an average of about £2,000 a year to reflect the recent surge in global gas market prices.
The trial will also help National Grid’s electricity system operator to gather data which it could use to reach its goal of running a zero carbon electricity grid by 2035.
Convincing households to become more flexible about when they use electricity is also expected to be crucial in the UK’s ambition to become a net zero carbon economy by 2050, according to Isabelle Haigh, the head of National Grid’s electricity system control rooms.
“This trial will provide valuable insight into how suppliers may be able to utilise domestic flexibility to help reduce stress on the system during high demand,” she said, which could help lower the cost of matching the UK’s electricity supply and demand.
The scheme is similar to contracts already offered to high-energy-using companies by National Grid’s system operator arm, which pay them to cut their electricity use when demand is high.
It also mirrors an existing Octopus Energy tariff which in the past has paid thousands of customers to use more electricity when renewable energy supplies outstrip demand, such as in the early hours of a blustery morning.
James Eddison, the chief technology officer at Octopus and co-founder of the company, said its previous home energy trials have shown that households “can play a key role” in improving the efficiency of the UK’s electricity system and “making sure that we’re making the most of homegrown green energy when it’s abundant”.
The trial could pave the way for new tariffs that make it possible for households to cut their power bills while helping the UK to become more energy efficient and less reliant on fossil fuels such as gas power plants.
It could also encourage households to install smart devices such as digitally connected electric car chargers, washing machines and dishwashers alongside home solar panel and battery packs which are expected to play a growing role in creating a carbon neutral electricity system.
