The National Energy System Operator (NESO) has paid out almost £778,000 since mid-April to households and businesses for reducing electricity use during grid stress, according to figures revealed by the Financial Times. Consumers cut demand by 4,739 megawatt hours (MWh), enough to power around 693,000 homes for a day, with payments channelled through suppliers like Octopus Energy.
How the Demand Flexibility Service works
NESO's Demand Flexibility Service, approved by Ofgem for year-round operation, rewards customers for reducing demand at peak times and, for the first time, for using more power when renewable electricity is plentiful. On July 9, during soaring temperatures, NESO paid £47,288 to encourage reduced demand between 5pm and 11pm, cutting usage by 233 MWh.
More than 2.46 million homes and businesses have already signed up to participate through energy suppliers and third-party providers, NESO said.
Energy firms already paying customers
Octopus Energy runs Saving Sessions, where customers earn points or bill credits for reducing peak electricity use. It also offers Free Electricity Sessions and regional Power-Ups, giving eligible customers periods of free electricity when local renewable generation exceeds demand. Customers on Octopus Agile can benefit when wholesale electricity prices fall to zero or negative.
EDF has offered Sunday Saver promotions, while several suppliers now offer smart tariffs for electric vehicle charging or heat pumps that automatically shift usage to cheaper periods.
Growing importance of flexibility
A NESO spokesman said: "Flexibility is becoming an increasingly important part of running Britain's electricity system." The shift reflects the Government's ambition to decarbonise the grid and the challenge of managing swings in renewable generation. On sunny or windy days, Britain can have excess electricity, while facing shortages on calm evenings. Instead of paying wind farms to switch off or firing up gas generators, it is increasingly cheaper to persuade consumers to change their behaviour.
For households, that could mean earning cash by waiting an hour to put the dishwasher on or charging an electric vehicle when clean electricity is abundant.
