According to the National Grid, households could be rewarded for not using certain appliances such as tumble dryers, dishwashers and gaming consoles during peak hours – between 5 p.m. to 8 p.m. Rebates could be as high as six pounds ($7.06) per kilowatt-hour (kWh) saved. (Related: At least 75,000 Brits to stop paying utility bills in response to unfettered inflation.)
The National Grid is reportedly finalizing its plans for this rebate system. Once it is finalized, the operator will apply to the Office of Gas and Electricity Markets (Ofgem), the government regulator for electricity and downstream natural gas markets, for approval.
"We are developing a new service that will be available for consumers to benefit from across this winter and will be announcing further information soon," said a spokesman for the National Grid.
Discussions about rebate programs came about as Ofgem plans to raise the energy price cap – the maximum price energy producers are allowed to charge households for each unit of energy they use – from 1,971 pounds ($2,320) per year to 3,500 pounds ($4,121) in October and then 4,200 pounds ($4,945) in Jan. 2023.
Experts further warn that, by April 2023, the energy cap could be raised to as high as 6,000 pounds ($7,065) per year for the average household as the global energy market remains in turmoil.
Faced with concerns that this rebate program is about forcing British citizens to ration electricity, a spokesman for the National Grid denied this, adding that it is "definitely not about people sitting in the dark or volunteering to be cold."
"It is about doing the washing at a different time of (the) day, that sort of stuff," said the spokesman.
According to the National Grid, only households with smart meters installed would benefit from the rebate scheme.
The program is based on a trial conducted by Octopus Energy earlier this year that gave the National Grid an indication of how the scheme might work in practice.
The company offered incentives to 100,000 households in return for voluntary reductions in energy usage. Consumers were paid as little as 20 pence ($0.24) for every kWh of energy saved.
Consumers were told to reduce their energy consumption during two two-hour windows, between 9 to 11 a.m. and 4:30 to 6:30 p.m. Octopus said consumers saved an average of 23 pence ($0.27) per two-hour window, with some saving as much as 4.35 pounds ($5.12).
For the wider rebate program, those who cut back on their energy use will have the option of receiving credit on their energy accounts or having the cash transferred directly into their bank accounts.
The scheme could begin as soon as late October, when bills are set to rise. Ofgem has confirmed that it has not yet received any concrete plans regarding rebate programs. But the National Grid has already begun consulting with various energy firms.
Even before the rebate scheme takes effect, the government and energy suppliers are already advising households to voluntarily conserve energy. Some households with special Economy 7 meters or the equivalent could already save money by consuming electricity during off-peak hours.
Households that do this will be charged less for off-peak energy, which usually refers to a seven-hour period between 11 p.m. and 8 a.m.
Most energy firms in the U.K. offer lower rates for energy use during this seven-hour period. However, households are advised to use the majority of their energy during this window to make it worthwhile because there is a higher charge during peak times under the Economy 7 meter.
Learn more about the energy situation around the world at NewEnergyReport.com.
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