Will paying for lowering electricity consumption be the solution to the energy crisis in Europe?
Reduced gas supplies were caused by Russia’s invasion of Ukraine and the western sanctions that followed.
The latest is only one of the reasons for the latest energy crisis in the world.
Energy supplies have been hit, while hotter summer than usual has also decreased nuclear and hydroelectric power generation.
All this adds up to less electricity for consumers to use. During peak times in the winter when demand is greatest, there might not be enough for everyone. One of the possible solutions would be to start saving electricity.
As a result every day we hear of new plans that aim to fill the shortage, either on the supply side with alternative power sources or on the demand side.
The plan of the UK to lower the demand for electricity during pick hours
Households with smart meters could be paid not to use their electrical appliances at peak times this winter.
Brits could end up making money from keeping certain devices switched off at certain times of what is expected to be a difficult winter.
Citizens of the UK could be paid as much as £6 for every kilowatt hour they save between 5 pm and 8 pm, which are considered peak times in usage for the UK electrical grid.
Among the devices that may be asked to avoid, including games consoles, dishwashers, and dryers which are big electricity consumers.
The operators of the National Grid Systemintend to reach out to Ofgem to approve the plan and implemented it by late October.
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A spokesperson for the National Grid said: “We are developing a new service that will be available for consumers to benefit from during this winter and will be announcing further information soon.”
This scheme follows a trial that Octopus Energy customers took part in earlier on this year. Those who took part in the trial were paid 20p for every kilowatt-hour saved.
Considering that a range of rates is being examined for this incentive it’s not yet time to get too excited. Although the possibility of earning as much as £6 could be exciting it might end up being less.
How effective could such a scheme be?
For reference, a kilowatt-hour of energy would keep an electric water heater going for a few minutes or have a dishwasher running for less than an hour.
Currently, the average cost of electricity in the UK stands at £1,971 per year. This figure is going to rise sharply in October when the price cap increases.
Prices are estimated to almost double, potentially shooting up to £3,500-4000 a year when the cap changes again in January.
We will get to know more on Friday (26 August) when Ofgem will publish the price limit for October onwards.
The government is insisting it would be unlikely that weather conditions will be so severe as to cause intended shutdowns of powerlines throughout the winter, hopefully, the new scheme will be one way to prevent it
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