Are you eligible for the National Grid's Demand Flexibility Service payout?

Hundreds of thousands of households in the UK will be paid to use less electricity again this winter.

The National Grid announced on Friday that it is renewing its Demand Flexibility Service after it was introduced last year.

Under the scheme, designed to reduce pressure on the energy network, people who use less electricity than normal during certain peak periods will be paid, helping them cut down on their energy bills.

About 1.6 million households and businesses took part in the scheme last winter, and were paid a total of just under £11m.

On Friday, National Grid's Electricity System Operator (ESO) confirmed the scheme will run again this winter, subject to approval by regulator Ofgem.

What is the National Grid electricity discount scheme?

The Demand Flexibility Service (DFS) allows Britons to get paid for using less electricity during certain peak periods.

It has been devised by the National Grid ESO (Electricity System Operator) to ease energy supply when demand is at its highest on cold winter days.

Watch: UK risks wasting wind farms achievement without new links to grid

The scheme was used by about 1.6 million people last winter when it was introduced. Customers were rewarded with cash for not using electrical appliances such as ovens and dishwashers during peak hours.

This year, the National Grid says customers "will again be able to earn pounds, points or prizes across the winter period by shifting their energy usage outside of specified periods".

It said that alongside the potential "live" use of the service to help balance the electricity network, there will be 12 test run events for energy providers, businesses and consumers between November 2023 and March 2024.

The scheme will offer providers a guaranteed £3 for every kilowatt-hour they save during six of the 12 tests.

This money will be paid to suppliers, who will take their share before passing the rest on to businesses and consumers.

Some customers saved up to £20 from last winter's scheme.

Who is eligible to take part?

To sign up for the Demand Flexibility Service, households in England, Scotland and Wales must have a smart meter, which give readouts every 30 minutes to energy providers.

Eligible customers will be contacted by their energy suppliers if the provider is signed up to the scheme.

More than 30 suppliers signed up to last year's scheme.

Jake Rigg, corporate affairs director, at ESO, said: “The ESO will be reintroducing the Demand Flexibility Service for this winter and is keen for more consumers, both large and small, to get involved. We want to work with industry to build on the past success of this new and innovative service.

"Across last winter the Demand Flexibility Service successfully demonstrated the interest of consumers and businesses in playing a more active role in balancing our electricity needs and to be rewarded with savings for their action in the process.”

What else does Ofgem have planned?

Energy regulator Ofgem has yet to approve the renewal of the Demand Flexibility Service, but reports suggest it will do so.

Last month, Ofgem began a consultation on building a system that could save households billions of pounds in energy bills each year.

It wants to ensure people use electricity when it is more plentiful, as users will have to respond to supply from electricity sources such as wind and solar power.

Ofgem envisions an automated system whereby households could set up their electric heating to only come on, or their electric car to only charge, at times when demand for electricity is lower, such as overnight, or when the wind is blowing strongly.

This could allow them to use electricity when it is cheaper, bringing down bills.

Ofgem deputy director of digitalisation and innovation Marzia Zafar said: “The key to unlocking high consumer uptake is making it both attractive and easy to participate in.

"As the regulator we are seeking input from a wide range of stakeholders including those working in industry, the providers of smart home and transport assets, consumer representatives and other parties interested in flexibility.”

Watch: Households paid to slash energy usage during peak times