During the upcoming winter season, households and businesses in England, Scotland, and Wales equipped with smart meters may have the opportunity to receive reduced electricity bills by consuming less energy during peak hours. This option will be available to customers of suppliers offering the Demand Flexibility Service, which helps prevent energy demand from exceeding supply. To participate, customers must have smart meters capable of transmitting readings to suppliers every 30 minutes.
Customers who don't have a participating supplier can still take part by using an independent company that retrieves the necessary data from their meter via a mobile application.
National Grid ESO, the organization that managed the service from November 2022 to March 2023, reported that approximately 1.6 million households and businesses participated, resulting in a reduction of 3,300 megawatt hours of electricity consumption across 22 peak periods.
Participating households were notified in advance of expected peak periods for energy demand, typically occurring in the late afternoon or early evening on weekdays. This allowed them to reduce their electricity usage. The amount of money saved per kilowatt hour of energy not used during the peak period ranged from £3 to £6, depending on individual suppliers' terms.
The final terms for this winter are currently being discussed in a consultation process.
A survey conducted among nearly 24,000 participants revealed that 62% expressed satisfaction with their experience, and 83% indicated their willingness to participate again. Most respondents (85%) learned about the service through their energy providers.
When asked about their primary motivations for participating, 76% cited the financial benefits, 41% mentioned the challenge, and 37% stated their motivation was to contribute to grid balance and ensure a stable energy supply.
Regarding the main benefits of taking part, 42% expressed satisfaction in managing the challenge, 39% highlighted the rewards earned, and 38% appreciated being part of a national collective effort.
However, certain demographic groups were underrepresented, including younger age groups, lower-income households, renters, and urban residents. The network operator acknowledged the need for monitoring participation to understand any inequalities in accessing the service's offers and differences in outcomes among participants.
The discounting service was introduced by National Grid ESO as a measure to mitigate the need for enforced power cuts in the event of energy demand surpassing supply due to Russia's invasion of Ukraine. Sanctions on Russia's gas exports posed a threat to Europe's gas supply. The network operator also emphasized the ongoing risks and uncertainties related to the Russian invasion of Ukraine for the upcoming winter season.
How can PSP help?
The energy terms found on your business energy bills can be very confusing and we understand the difficulties this can bring to business owners. We understand these challenges and will work with businesses to ensure that they fully understand their bills and to make better informed decisions when it is time to renew their contracts.