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UK's National Grid to pay people to use less power as cold snap bites

LONDON (Reuters) -Britain's National Grid said it would pay customers to use less power on Monday and Tuesday evenings this week, the first time it has used a new scheme designed to help prevent power shortages.

More than a million households and business are signed up to the Demand Flexibility Service (DFS), which rewards people, usually via money off their bills, for turning off appliances such as ovens and dishwashers during a specific period when electricity demand is high.

National Grid warned in October that homes could face three-hour rolling power cuts this winter if the country was unable to secure enough gas and electricity imports. It launched the DFS as part of its tool box to help prevent cuts.

The service, which has been trialled but not run in a live situation before, would run from 5 p.m. to 6 p.m. on Monday, it said, adding that the move did not mean electricity supplies were at risk and advised people not to worry.

The measures were announced in order to "ensure that everyone gets the electricity they need," Craig Dyke, head of national control at National Grid ESO, told BBC Radio on Monday, adding that 26 suppliers had signed up for the scheme.

Below-freezing temperatures have been recorded across much of the UK in recent days with the national weather service, the Met Office, last week issuing severe weather warnings for snow and ice.

A separate measure calling on coal-fired power plants to fire up as back up power was stood down for Monday evening as the supply picture had improved, a National Grid spokesman told Reuters via telephone.

However, National Grid said three coal-fired plants had been instructed to warm up to be on standby for Tuesday, and also called on those signed up to the DFS programme to again curb electricity use between 4.30 p.m and 6 p.m.

"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," the National Grid's ESO said in a statement.

Jonathan Brearley, chief executive of British Energy regulator Ofgem, said on Monday the country's overall power supply outlook had improved from when National Grid first warned of potential power cuts.

He said high gas stocks in Europe and an improvement in the operation of French nuclear plants, which often provide electricity to Britain via several power links, had helped to ease the supply risks.

However, "as today's events show ... we need to remain vigilant and cautious about what may happen in the future," he said at an Institute of Government event.

(Reporting by William Schomberg, Muvija M, Susanna Twidale and Michael Holden in London, and Sneha Bhowmik in Bengaluru; Editing by Andrew Heavens, Kirsten Donovan and Mark Potter)