National Grid ESO is running a demand flexibility service this Winter where UK energy consumers with smart meters will be paid to reduce their consumption.
Image courtesy National Grid ESO.
Ofgem granted approval for the service on Friday, which has been running since 3 November 2022 and will continue until 31 March 2023.
Ofgem’s approval means that electricity suppliers and aggregators (providers) can now formally join the service by signing commercial contracts and can work with their customers to ensure engagement and participation.
The service, available for British consumers with smart meters, will see participants receive emails or texts with time slots when they could be paid via money off their bills for reducing electricity use.
According to the British utility, the trial successfully proved the concept, allowing them to work with suppliers, aggregators and consumer groups to scale it up to a national service for much needed support this Winter.
The service follows and is based on a trial between National Grid and Octopus Energy in February this year, where Octopus Energy’s 1.4 million smart meter customers received a financial incentive to reduce power consumption below usual levels for two-hour windows across key periods.
In the coming days, the ESO will look to run the first demonstration events for the service, with those providers that have ensured they are ready and able to participate. Ofgem has confirmed that these demonstration events will include a guaranteed acceptance price for the providers that participate, set at £3,000 ($3,416)/MWh.
Further details on how these demonstration events have performed will be made public following delivery.
Fintan Slye, executive director of the ESO, said: “We are delighted that Ofgem have approved the use of our demand flexibility service this Winter. It will help mitigate the potential risks that the ESO has outlined in its Winter Outlook and will allow consumers to see a financial return for reducing their electricity use at peak times.
