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Weekly Short
26 August, 2022
We’re heading into uncharted territory in terms of energy usage and pricing. As charities and think tanks call for urgent action on pricing, other ideas are emerging to address demand, and find ways to encourage consumers to reduce their usage – good for their pockets, and good for the planet.
Leading the way is Octopus Energy. It has run a successful trial that rewards households – up to £840 in some cases – to switch off appliances during peak time and reduce the likelihood of blackouts. Customers with smart meters opted in and then received SMS notifications at high demand times encouraging them to turn off appliances and start them later when spare capacity was available. Those who had successfully dropped demand by 30-40% were rewarded with a modest payment of 22.7p for every kWh. The National Grid is now applying to Ofgem for permission to scale this up and offer higher rates of repayment, possibly up to £6 per kWh. With the average unit price of electricity for domestic customers forecast to reach 51p per kWh later this year, that would be a substantial saving for households.
Meanwhile, plans are afoot to allow owners of electric cars to sell their stored energy back to the grid to be used elsewhere and get returned when there is availability. Electric vehicles are giant batteries on wheels, standing dormant for an average of 23 hours a day, that can be used to store power during down times and, when required, be used to supply up to 1/3 of peak energy. The approach is being tested with specially programmed Nissan Leaf vehicles, which contain enough energy to power up to 100 homes when fully charged.
Necessity breeds invention. There are painful times ahead for energy consumers, and we’re all going to be much more aware of how we use (or don’t use) energy over the winter. While we can (and will) be turning off lights, using our ovens less and thinking twice before turning on the heating, projects such as these could turbo-charge the country’s energy saving efforts, leading to lower bills and lower carbon emissions.
By George Hargreaves