Energy firm offers people £20 a month to cut power use

Households will be offered £20 a month to cut their energy usage during peak hours in a trial scheme from one of the country’s biggest suppliers to help avert rolling blackouts this winter.

Ovo Energy, which has 4.5m customers, will offer families money if they are able to cut their energy usage by a third between 4-7pm when demand on the grid is highest, amid concern of electricity shortages.

It said this was the equivalent of moving three loads of washing per week to outside of peak time.

Households and businesses could be cut off for three hours a day in the worst case scenario if electricity supplies run short on cold days when the wind is not blowing, the National Grid warned in its annual winter outlook on Thursday.

The National Grid said incentives from energy suppliers for households and businesses to cut their use during peak time would be vital to avoid power cuts.

Russia has cut supplies of gas, the biggest source of the UK’s electricity, to Europe amid tension over the war in Ukraine. Although the UK sources just 4pc of gas from Russia, the deficit in Europe could have knock-on impacts on the supply and price of imports from elsewhere.

Ovo Energy said its trial, which will only be available for customers on a smart meter, will help it develop green tariffs by providing data on peak usage.

Green tariffs are expected to incentivise customers to use power during off-peak hours in the longer term, in order to reduce the strain on the grid as the UK shifts to renewable energy.

Ovo Energy will contact eligible customers ahead of its trial, which will take place from November 1 to March 31 2023.

Raman Bhatia, CEO of OVO, said: “The UK energy sector is at a crucial point, and we need a resilient grid to get us through this winter.

“This trial provides essential consumer data which can be shared with the Government and the National Grid to prevent power shortages, and will give customers a deeper insight into their energy consumption habits, with great potential savings.”