Shifting electricity usage outside of peak demand hours allows the Electricity System Operator (ESO) to manage supply through periods when margins are tight. The ESO ensures the country has the essential energy it needs by meeting supply demand every second of every day.
Companies have been forced to make adjustments to this year's extreme weather. The government is offering Winter Fuel Payments in an effort to help Britons meeting their needs in the cold.
“Our forecasts show electricity supply margins are expected to be tighter than normal on Wednesday evening," National Grid said.
"It does not mean electricity supplies are at risk and people should not be worried. These are precautionary measures to maintain the buffer of spare capacity we need."
What is the DFS scheme?
The DFS was introduced in the winter period between 2022 and 2023 when more than 1.6 million households and businesses participated. This provided around 350 milliwatts of flexibility to the ESO.
Fintan Slye, executive director of the ESO, said: “We are delighted that Ofgem has approved the use of our Demand Flexibility Service this winter.
“It will help mitigate the potential risks that the ESO has outlined in its Winter Outlook and will allow consumers to see a financial return for reducing their electricity use at peak times.
“As a responsible operator of the electricity system we have developed this innovative Demand Flexibility Service to compliment the robust set of tools we already use to balance the electricity system every day.”
To ensure that there are rewards in place for participating households and businesses, the ESO will again run 12 tests between November and March 2024.
The first six of these tests pay registered DFS providers a guaranteed minimum price of £3KWh. They will generally pass this on to customers through discounted bills, but also points and prizes.
Who can participate?
Households with smart meters, or a business site with half-hourly metering, will be able to sign up. This is via either retail energy suppliers or online providers and apps participating in the service.
Those who have signed up to the DFS with a registered provider will contact the household before events to let them know the times to reduce electricity use.
However, like this evening, if the DFS is for a live event, the time could run on for a longer period.
People should note that the service is voluntary and that there are no penalties for not participating. To be eligible to receive an incentive from providers, people must reduce energy use during the DFS event times.
DFS organisers will monitor this and read data every half hour during the service once households authorise them to access their smart meter.