The UK's National Grid is exploring the idea of paying companies in Britain to use less electricity next winter as part of measures to conserve gas and avoid blackouts, Bloomberg reported on Thursday, quoting a document it had seen.
National Grid has sent requests to some companies, asking them how much money they would be willing to accept in order to reduce their power consumption from the national power grid this coming winter, Bloomberg reports.
Possible payments could start from $121 (£100) per megawatt-hour (MWh) to $7,274 (£6,000) per MWh, according to the document seen by Bloomberg.
Natural gas accounts for more than one-third of the UK's power generation. On Monday, for example, gas generated 47.2% of Great Britain's electricity, more than wind whose share was at 24.1%, nuclear at 16.7%, solar 6.3%, biomass 2.8%, hydro 1.5%, and power imports 1.4%, National Grid ESO data showed.
Although the UK North Sea produces a lot of gas, Britain also relies on imports from Norway and gas imports via interconnectors from Belgium and the Netherlands during the winter months. A worsening of the current gas and energy crisis in mainland Europe would be felt throughout the UK, where customers are already grappling with a surge in the cost of living and the highest inflation in forty years. Moreover, many households in the UK heat with gas, so British gas demand is high during the winter months.
The National Grid also plans to pay millions of households with smart meters if they voluntarily ration and reduce their power consumption at peak times to avoid blackouts this winter, The Times reported earlier this week, citing initial proposals it had seen.
The UK is also considering cutting off gas supply via two interconnectors to mainland Europe under an emergency plan that would be triggered in case of severe gas shortages in Britain, the Financial Times reported on Wednesday.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More