Money-off scheme for cutting energy use at peak times launches today - see full list of firms taking part

Ofgem has backed a National Grid scheme that will allow Britons to earn financial rewards for saving power at times of peak demand.

Households and businesses, which must have smart meters to qualify for the scheme, will be told in advance that they should avoid using energy intensive appliances at a certain point on a particular day.

National Grid, which revealed the service as part of efforts to avoid potential blackouts over the winter months, has said households could save up to £100 through the limited scheme.

Energy watchdog, Ofgem, has approved the proposals for the National Grid electricity system operator (ESO) to launch the programme, called a “demand flexibility service”, from November until March.

In the coming days, the ESO will seek to run the first tests for the service, which will also be available to businesses.

There will be a total of 12 test days to see how customers respond. Households participating in the programme will be sent a message from the network if there is increased pressure on the system.

It will ask people and businesses who have signed up to reduce or move their electricity usage outside peak hours.

It comes a month after the operator warned in its winter outlook that the first planned blackouts in decades might hit parts of the country this winter if power plants cannot get enough gas to keep running.

In what it called an “unlikely” scenario, the ESO said that households and businesses might face planned three-hour outages to ensure the grid does not collapse.

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.

“As a responsible operator of the electricity system we have developed this innovative Demand Flexibility Service to compliment the robust set of tools we already use to balance the electricity system every day.”

Here is the full list of firms taking part:

British Gas has said that it will take part in the financial reward scheme, but has yet provided details of how it will work and when it will be launched.

E.ON is also set to participate in ESO’s programme, and has similarly not yet published details of the operation.

Octopus Energy customers are able to sign up to its Saving Sessions scheme, which opened on 1 November and will run until 31 March. “OctoPoints” will also be rewarded to those using less electricity than usual.

“OctoPoints can be turned into prizes, donations to our Octo Assist fund for customers in need, or cold hard cash. We’d expect an average home’s rewards over winter to be worth around £36 overall, but could be up to £100,” its website reads.

The Power Move scheme was launched by OVO Energy on 1 November. Customers will be offered rewards for reducing their energy usage between 4pm and 7pm from 19 per cent of total daily usage to 12.5 per cent.

Additional reporting by agencies