National Grid explores paying UK households to turn down heating

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Households in Britain could be offered payments to turn down their heating if needed to prevent gas shortages, under plans being considered by the UK’s biggest network operator. 

National Gas, which owns Britain’s main transmission network, is exploring plans for a similar scheme to one introduced for electricity customers last year after market turmoil triggered by Russia’s war on Ukraine. 

Under the proposals, households could volunteer to be offered payments to cut gas usage if shortages loomed, as one of many tools available to the network operator to help manage demand.

National Gas already has such a scheme for large industrial users, but any extension to households could be controversial given the importance of gas for heating homes and cooking food. 

The company, which is majority-owned by Australian bank Macquarie, expects to run a “small-scale” exercise this year to see if it is something it wants to introduce in the long term. 

Glenn Bryn-Jacobsen, head of energy resilience for National Gas, said: “We could end up in a situation where households can effectively say, ‘I’ll turn down my heating by two degrees today and make that saving’.”

But he cautioned the current effort was “more of an information gathering exercise to understand whether or not it should be part of any future balancing arrangements”.

The trial comes as energy network operators said Britain is heading into winter in a more resilient position than last year, but still warned energy shortages cannot be ruled out. 

Russia’s cuts to European gas supplies, combined with outages on France’s nuclear power fleet, threw energy markets into turmoil last year and led to warnings in the UK about blackouts.  

This year, the EU has managed to fill its gas storage sites to more than 90 per cent ahead of November, while EDF expects its French nuclear power stations to be running at much higher capacity. 

European supplies affect Britain because it relies on imports of gas and electricity at peak times, and also exports both back to Europe. 

National Gas has also revised up its assessment of the maximum amount of liquefied natural gas the UK can import in shipments from around the world, having seen the system operating close to capacity last winter. 

However, cold weather combined with the potential further loss of Russian gas to Europe could put the system under strain. 

“Whilst we are, collectively, in a better place than we were last year, it’s important to remain aware of the risks that are present,” Radley said.  

National Grid’s electricity system operator said it expects there to be “sufficient operational surplus” but warned “risks and uncertainties remain in global energy markets”. 

The ESO added it was able to take emergency measures such as planned, controlled blackouts in individual areas if needed to prevent uncontrolled shutdowns.  

The electricity operator also plans for the second year to have the option to call on households and businesses to cut their usage if needed at peak times to help manage the system. 

Under the “demand flexibility service”, households and businesses can voluntarily sign up to be paid by National Grid to cut usage for an hour or two, for example by delaying the washing machine, if shortages loom.