Minister of State for Energy Charles Hendry has revealed plans for a new scheme which will pay guzzlers to use less during peak energy demand periods. In a bid to reduce the UK’s carbon emissions, the scheme will reward big power consumers for each ‘negawatt’ of capacity they switch off.
This move, which is part of a plan to overhaul the electricity market due to be drafted by Christmas, means that for each negawatt (theoretical unit of power representing the amount of energy saved in watts, usually as a direct result from energy conservation or increased efficiency) of capacity large energy consumers switch off, they could receive a monetary payment.
“We’re looking at capacity payment to take demand out of the system,” Hendry said to delegates at an event hosted by the Major Energy Users Council. “What is the best way to manage demand? Either provide physical supply or shave demand.”
U.K. utilities need to spend 200 billion pounds this decade to upgrade infrastructure and replace stations to meet climate-change targets, according to U.K. regulator Ofgem. Electricity costs are set to rise as about a third of Britain’s power plants shut and are replaced by renewable generation technologies, such as solar power.
“There has never been a better time for demand side participation to contribute to our energy policy goals” said Graham Meeks, Director of the Combined Heat & Power Association. “With the enormous cost of new generating capacity, the value of energy savings and flexible action by energy consumers is considerable.”
