UK energy users could be offered cheap rates when demand is low
Consumers could be offered cheaper rates to use energy when demand is low, under proposals drawn up by the government.
The Department for Business, Energy and Industrial Strategy on Monday launched a 12-week consultation on the “biggest electricity market shake-up in decades” in response to sky-high bills and Britain’s move towards renewable energy sources.
One proposal suggests the introduction of incentives for consumers to draw energy from the grid at cheaper rates when demand is low or if the weather is particularly sunny and windy, saving households money.
Officials said such a move could send “sharp” signals to encourage consumers to be more flexible in their usage and seek cheaper, greener energy at certain times. The initiative would minimise network costs by bringing electricity demand closer to supply.
If introduced, the policy would build on a scheme being developed by National Grid to tackle prices this winter. It plans to reduce the risk of blackouts by paying consumers to use less electricity at peak times.
The Review of Electricity Market Arrangements (REMA) consultation also proposed a “decoupling” of gas prices from electricity prices to ensure the benefits of cheaper wind and solar power trickle down to consumers.
At the moment, the wholesale price of gas effectively determines how the price of electricity is set regardless of whether the energy is produced via renewables.
This mechanism has forced up costs for green energy suppliers since the start of the energy crisis, in which nearly 30 suppliers have gone bust.
More than a quarter of the UK’s electricity supplies are delivered from renewable sources. However, rising gas prices, exacerbated by the war in Ukraine, have increased prices across the board and
Read more on theguardian.com
