British Gas owner Centrica PLC (LSE:CNA), Drax Group (LSE:DRX) and Octopus Energy will take part in the UK’s second demand flexibility service on Tuesday evening.
Initiated for the first time on Monday, the scheme run by National Grid PLC (LSE:NG.) Electricity System Operater involves smart meter customers being paid to avoid using energy at peak times.
According to Octopus, some 400,000 customers took part on Monday, being paid £3.37/kWh of energy they did not use between 5pm and 6pm.
Tuesday could see them paid up to £4/kWh, after National Grid offered higher prices to incentivise people to join in between 4:30pm to 6pm.
National Grid had also ordered three coal fired power stations to warm in case of demand surges on Tuesday evening, including EDF Energy’s West Burton station and two Drax operated units in North Yorkshire, but later stood them down as the reserves were not likely to be needed.
Alongside the live Demand Flexibility Service event on Tuesday evening we have now instructed 3/5 winter contingency contract coal units to warm for availability tomorrow if required.
— National Grid ESO (@NationalGridESO) January 23, 2023
A lack of wind and colder weather has seen the UK’s energy market become tighter in recent days, according to National Grid, similar to December’s cold snap, where prices skyrocketed.
Gas was the UK’s leading power source on Monday amid the colder weather, accounting for 53.7% of domestic production, as per data from the grid.iamkate.com website.
Experts suggest this is a downside of Britain's reliance on wind energy, which is less predictable as it relies on wind speeds of between 8mph to 55mph to operate.
Imperial College London and Apricum researchers suggested that the UK’s storage capacity will need to be upped by nearly ten times in the next 30 years, from 3GW in 2020 to roughly 30GW, to complement the growing number of wind turbines and solar panels in the UK.