If households limit high power activities during periods of high demand, such as charging electric vehicles, running dishwashers, tumble-dryers and washing machines, the new scheme will allow people to save cash on their bills. However, this will only be impactful for households with a smart meter installed.
Peak times are typically between 17:00 and 20:00 when most people are returning from work. Households willing to turn off high usage items during this period can expect to be rewarded. The initiative aims to ease the pain of rocketing energy bills which could rise by as much as £6,000 a year for the average family from April 2022. It is estimated that households could save up to £6 per kWh by engaging with this scheme, but a trial overseen by Octopus Energy covering around 100,00 households predicted savings far lower at roughly 28p or less per kWh.
The reason for this scheme being introduced follows on from Russian gas supply shortages. Gas capacity in the UK is running at around 20 per cent of what was flowing before, and the situation could worsen as we approach winter, causing mass power outages. The result is energy companies colluding with the government to devise initiatives that could avoid these problems and ease pressure on households.
A “reasonable worst-case scenario” proposed by government would involve the UK facing targeted blackouts affecting millions of businesses and households for days on end. On top of this, household bills are forecast to reach £3,553 a year in October, £4,799 in January, and potentially £6,089 in April, according to an analysis by Auxilione.
Energy market reforms are needed to address the dystopian issues facing UK households today. As of yet, no definitive solution has been tabled which will guarantee sufficient cuts to energy bills or the avoidance of winter blackouts.