Discounts return to cut electricity use amid cold snap

Discounts will be offered to some households to use less electricity at peak times on Wednesday in a bid to ease demand amid the cold weather snap.

Suppliers signed up to the National Grid ESO scheme will offer money back to customers with smart meters who cut usage between 17:00 and 18:30 GMT.

National Grid said the decision did not mean electricity supplies were at risk, adding "people should not be worried".

It started the scheme last year and ran its first event earlier in November.

Individual energy suppliers decide how much customers are paid to cut consumption, and whether the money is taken off bills, credited to accounts, or if available to be withdrawn as cash.

National Grid ESO said it decided to offer discounts in return for people reducing their electricity consumption after its forecasts showed tighter than usual supply margins on Wednesday evening.

"These are precautionary measures to maintain the buffer of spare capacity we need," the network operator said.

Maximum temperatures this week across much of the UK are expected to be around 2C to 6C - but it may not even get above freezing in parts of Scotland and northern England.

The Met Office has issued two yellow weather warnings for snow and ice. One runs until 11:00 GMT on Wednesday for parts of northern and eastern Scotland, north-east England and Yorkshire, with a second in place until 11:00 GMT on Thursday for eastern Scotland and north-east England.

The so-called Demand Flexibility Service enables households to save cash if they avoid high-power activities, such as cooking or using washing machines, for a specified period when demand is high.

The cold weather and a lack of wind is expected to contribute to higher power demand, but National Grid ESO said deploying the scheme was based on a "combination of factors".

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The scheme is also open to businesses who could, for example, change production schedules or switch to batteries or generators at peak times.

Last year, National Grid ESO said 1.6 million households and businesses who were customers of 31 energy suppliers participated in 22 "events".

It said the amount of energy saved was enough to power almost 10 million homes.

However, as individual suppliers decide their own discounts it is difficult to know how much money on average was earned.

Octopus Energy confirmed it would sign up for Wednesday's session. The company said last year 700,000 of its customers took part and the top 5% of participants saved about £40 over the winter.

This winter the supplier said it was offering its customers points or account credits, and was aiming to create options for people to turn them into charity donations.

Any Octopus customer who signs up will be awarded 100 points on their account. A further 3,200 points are available per kWh saved, which the supplier said was worth £4.

The UK is heavily reliant on gas to produce electricity, with gas-fired power stations generating more than 40% of the country's supply.

The disruption of gas supplies last winter to Europe from Russia following the outbreak of war in Ukraine left many countries scrambling for alternative supplies, which increased demand and had a knock-on impact on Britain, with household bills soaring.

While gas and electricity prices are lower than last year, most households will actually pay more for energy this winter compared with last, because government support for bills is no longer in place.