National Grid could pay you to use less electricity from today

The National Grid is paying customers to cut energy use today as the cold weather places a strain on supply margins - find out who will get the payment

Woman with smart meter
(Image credit: © Getty Images/iStockphoto)

We’re all looking to keep energy bills low and this week, you could be one of millions who could save money by cutting back on your usage.

The National Grid electricity system operator (ESO) is paying up to a million households to use less electricity today (24 Tuesday) between 4:30 and 6pm, saving you up to £20 on energy costs.

The scheme, dubbed the Demand Flexibility Service, aims to reduce energy usage amid blackout concerns.

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The scheme was initially offered to selected households as part of a test last year, but yesterday it was rolled out to over a million households, giving them money off their energy if they used less between 5 - 6pm.

And today (24 January) - households who have signed up can reduce their bill if they scale back their energy usage between 4:30 and 6pm today.

So far the scheme has saved energy users nearly £3m, according to National Grid’s December data.

“As part of cautious measures to ensure we continue to have adequate operational reserves tomorrow evening the ESO has activated the Demand Flexibility Service for Tuesday evening between 4:30pm-6pm,” the ESO said in a tweet.

The DFS is available to smart meter customers who have signed up to the scheme. You could get paid £3 for every unit or kilowatt hour (kWh) saved when compared to your normal usage by delaying the use of power-hungry appliances, such as washing machines and ovens, until after 6pm.

Why is the National Grid paying you to use less energy?

The move follows a concern that energy supply shortages will cause blackouts, particularly when we hit a cold snap..

Paying consumers to reduce their energy consumption is one of the easiest ways to balance the system (and it’s far easier than building new power plants).

Mid-December the ESO said one million customers had signed up to participate, adding the DFS has led to 780-megawatt hours of demand reduction, saving customers over £2.8m across the five test periods since it launched last month.

The DFS’s first test event took place on 15 November, and four companies participated. The cost for the demand reduction added up to £363,000. Its fifth test event took place this past Monday, 12 December, between 5 pm and 7 pm, and a total of 14 providers participated. The cost for the demand reduction nearly tripled to £914,661.

“Delivering the first of the Demand Flexibility Service test events is a major milestone in the evolution of consumer flexibility in the UK,” said Craig Dyke, head of National Control at the ESO.

“This service successfully proves that consumers up and down the country are standing by to get involved in flexibility solutions. These test results show that if called upon, this service will help the ESO balance the national electricity network this winter and is a valuable addition to the ESO’s operational tools.”

The scheme was trialled by Octopus Energy earlier this year. The energy supplier asked its clients with smart meters to use more energy during off-peak times. Now the ESO is announcing a nationwide scheme for small to medium-sized businesses and homes with smart meters.

National Grid will pay energy suppliers signed up to the scheme to operate it and pass the savings on to the smart meter customers.

How will I get paid to use less electricity?

How you get the money will be down to your supplier, but you could see it as a credit on your bills – similar to the £66 instalments we’re getting as part of the £400 energy grant.

If you want to know if you can get money off your bill, you can check whether your supplier is one of the 26 to have signed up to the scheme. Customers in England, Scotland and Wales with a smart meter will be eligible.

You will get a notification from your provider explaining the scheme will be running. If you delay the use of power hungry appliances, you’ll see a discount applied to your bill.

According to National Grid the savings could amount to as much as £20 depending on how much energy you use.

Octopus Energy also unveiled its own scheme, “Saving Sessions”. For every unit of energy that customers save compared to their typical usage throughout a set time, Octopus calculates it will pay its 1.4 million smart meter customers £4 on average – saving them around £100 throughout the winter, until March 2023.

The supplier will send customers an email with information about its scheme and how they can sign up to get a text outlining the hours when they should use less electricity to qualify for the payment.

Why are we getting paid to use less electricity?

The ESO launched the DFS to help protect the grid throughout peak hours. Concerns about energy supplies throughout the winter have been increasing due to cuts in gas exports.

The National Grid warned earlier this year that the UK could face power cuts between 4 pm and 7 pm, during cold days in January and February, if we don’t get enough gas from Europe.

Of course, blackouts aren’t on the cards yet and the ESO’s campaign is aimed at incentivising customers to use less energy so we can avoid them.

The service is open to as many participants as possible, but it does require a smart meter as the ESO requires data in 30-minute intervals to validate electricity delivery.

The scheme is expected to run until March.

How can I use less energy?

Consuming less energy can be as easy as unplugging appliances you’re not using, particularly those which consume more electricity such as dishwashers or washing machines and tumble dryers.

Alternatively, running these appliances outside of peak hours (between 4 pm and 7 pm) could help decrease the strain on energy supplies. If you have an Economy 7 meter, you could already be benefiting from a cheaper night-time rate.

Finding the most effective way to run household appliances or heat your home can also help save on your energy bills. We have compared the costs of heating your home with radiators and electric heaters, fan heaters and oil heaters, and wood-burning stoves compared to central heating to help you determine what works best for you.

Knowing how to use your appliances efficiently is especially important when it comes to big-ticket items, so we’ve also compared whether it’s cheaper to use a tumble dryer or a heated airer, and heated airers vs dehumidifiers if you choose to forgo a tumble dryer altogether.

Nicole García Mérida

Nic studied for a BA in journalism at Cardiff University, and has an MA in magazine journalism from City University. She joined MoneyWeek in 2019.