National Gas pays UK households to reduce heating

The UK’s largest network operator is considering plans that could offer households in Britain payments to reduce their heating when necessary to avoid gas shortages.

National Gas, the company that owns Britain’s largest transmission network, is looking at plans to introduce a scheme similar to what was introduced last year for electricity consumers after market turmoil caused by Russia’s conflict in Ukraine.

The proposal would allow network operators to manage demand by offering households payments for reducing gas consumption if a shortage is imminent.

National Gas has a similar scheme for industrial users. However, extending it to householders could cause controversy given that gas is used for cooking and heating.

The majority-owned Australian bank Macquarie expects to conduct a “small scale” exercise in order to determine if this is something they want to implement on a long-term basis.

Glenn Bryn Jacobsen, National Gas’ head of energy resilience, said that households could effectively say: “I’ll reduce my heating by 2 degrees today to make this saving.”

He cautioned that the current effort is “more an information gathering exercise” to determine whether it should be included in future balancing arrangements.

The trial takes place as energy operators say Britain is in a better position heading into winter than last year. However, they warn that energy shortages are not ruled out.

Last year, Russia’s gas cuts in Europe, coupled with the outages of France’s nuclear fleet, caused energy markets to be in turmoil and led to UK blackout warnings.

The EU is expected to run its French nuclear power plants at a much higher capacity than they are currently.

The British economy is affected by European supplies because the country relies on gas and electricity imports at peak hours, as well as exports to Europe.

National Gas also revised its estimate of the maximum amount liquefied gas that the UK could import from around the globe in shipments, after the system was operating at close to capacity during the winter of last year.

The system could be put under pressure by cold weather and the possible loss of Russian gas in Europe.

“While we’re collectively in a much better position than last year, we must remain vigilant about the dangers that exist,” said Ian Radley.

Separately, National Grid’s electricity system operator stated that it expects to have “sufficient operational surplus”, but warned there are “risks and uncertainty in global energy markets”.

ESO said it could take emergency measures, such as planned and controlled blackouts of individual areas, if necessary to prevent uncontrolled shut downs.

In the second, the electricity operator plans to give households and businesses the option of reducing their consumption during peak hours to manage the system.

National Grid will pay households and businesses to reduce their usage by an hour or so, such as by delaying washing machines, in the event of a shortage.

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