What’s going on here?
The UK’s National Grid Electricity System Operator (ESO) is reportedly considering schemes that reward consumers for reducing their electricity demand at peak times.
What does this mean?
National Grid ESO is the transmission system operator responsible for balancing the supply and demand of electricity in the UK. In an effort to reduce the risk of blackouts this winter National Grid ESO is considering so-called ‘demand shifting’ approaches.
There are already tariffs available, like Economy 7, that offer different rates for electricity at different times but with these existing tariffs the time periods are fixed. The new proposal takes advantage of smart meters that have been rolled out across UK households in recent years. These allow for almost real time flexibility in electricity prices. In reality, though, prices are likely to be managed in one or two hour slots and consumers will be given some notice of when eligible periods will be.
Why should we care?
The headlines suggest these proposals are being explored just to mitigate the risk of blackouts due to global events like the war in Ukraine. However, these schemes could also have real impacts when it comes to making the way electricity is used in the UK more sustainable.
First off, the ESO has been at pains to state that this is not an electricity rationing scheme. Evenso, it feels implausible that it won’t lead to an overall reduction in electricity usage. As prices increase globally, consumers are becoming more and more aware of nonessential electricity use and a scheme that offers an opportunity to reduce bills further can only heighten this awareness. And afterall, the greenest most sustainable electricity is the electricity you never use.
Secondly, demand shifting can also help the grid be more green in a slightly less tangible way, by being more ‘flexible’. If demand can be managed in a more refined way it helps to mitigate one of the key hurdles to more widespread adoption of renewables, the unpredictability of supply. Other technologies, such as home batteries, are also synergistic with this approach.
The downside? The price discounts will need to be funded somehow. But, if demand shifting proves effective, it could well be more cost effective than other less green alternatives such as maintaining and operating fossil fueled power stations at peak times.
Check out the ESO dashboard which shows what mix of technologies are supplying the UK’s electricity live.
Haven’t got a smart meter yet, or don’t know if you do? Have a look at the Ofgem advice page here.