Customers get up to 50% more cash for slashing electricity use in first live run

Households will be in the running for a bigger-than-normal payout on Monday night as the grid tries to encourage people to use less electricity to help manage demand.

Grid managers said on Sunday that they would run the first ever live version of their new scheme which pays people to cut electricity use.

There have been several test runs in the past, but this is the first time that the Demand Flexibility Service is being used to ensure that the grid is balanced.

It is set up to ensure that no more electricity is being taken out of the system than is being put in at any given minute.

Traditionally the grid operator tends to do this by creating extra supply, but the new system allows it to reduce the amount of electricity that is being taken out.

The @NationalGridESO #DemandFlexibilityService is being activated this evening from 5-6pm. This does not mean that electricity supplies are at risk and people should not be worried. https://t.co/MagFmYZfll

— National Grid UK (@nationalgriduk) January 23, 2023

It is the second time that a live run of the Demand Flexibility Service has been called. Last time it was cancelled before it had time to take place but on Monday the service will definitely proceed as scheduled.

Customers of Octopus Energy are among those who can expect higher-than-usual payouts.

The supplier said that all customers who take part can expect to be handed £3.37 worth of points per unit of electricity they save, 50% higher than past payments.

Several other suppliers have also bid for higher contracts than usual, meaning they could be paying their customers more to take part.

National Grid said that 26 suppliers have signed up to its Demand Flexibility Service. Households with these suppliers have to sign up in advance and opt in to the system each time.

Octopus said that customers with a functioning smart meter can sign up at any point before the session starts at 5pm on Monday.

We are also activating a Live #DemandFlexibilityService event between 5-6pm tomorrow. This does not mean electricity supplies are at risk and people should not be worried.

— National Grid ESO (@NationalGridESO) January 22, 2023

Separately, the National Grid Electricity System Operator (ESO) also said late on Sunday that it had stood down the coal plants that it had asked to warm up ahead of the tight evening on Monday.

Knowing this winter was likely to be more challenging than usual due to the energy supply crisis that has hit much of Europe, the Government agreed deals with coal plants that would otherwise have closed to be on standby.

These plants need time to slowly warm up before they can start producing electricity for British homes so the grid needs to warn them in advance.

The warming-up order was cancelled on Sunday night. But because the plants spent most of Sunday warming up, they can now be called into action at shorter notice on Monday evening if needed.

Expert Adam Bell, who is head of policy at consultancy Stonehaven, said that the system was working as it should. Every day National Grid has to manage supply by calling up and standing down electricity generators.

“This is all fine and just the Grid doing its job”, Mr Bell said, adding that the demand flexibility side is “interesting”.

Craig Dyke, ESO head of national control, told Sky News: “We took the decision over the weekend to warm three coal-fired power stations, just for contingency, so not necessarily to run.

“Just to ensure that as we get through the evening peak today, we can ensure society that there will be electricity for them to use when they want to use it.”