Ovo launches flat-rate flexibility trial

Ovo has launched a flexibility trail that will see participants paid £20 a month for reducing their consumption during peak hours.

The Power Move initiative will run from 1 November to the end of March with customers able to apply from the middle of this month.

The company said it would use data from the trial to better understand peak time consumption and develop new propositions.

Participants will be asked to cut their average consumption during the peak hours of 4pm to 7pm to 12.5% of their overall daily average. Ovo says its customer data indicates that at present the average household uses 19% of their daily total during these hours.

As an example, the company indicates that moving three loads of washing per week to an off-peak time would meet the requirements of the scheme.

For each month participants achieve this reduction on average they will be given a flat fee of £20.

This differs from schemes such as the National Grid Electricity System Operator (ESO)-led demand flexibility service, also due to launch on 1 November, which is based on a price per kilowatt hour. Ovo is also understand to be speaking to the ESO about involvement in the demand flexibility service alongside Power Move.

The company cited an independent report it commissioned in partnership with Energy Systems Catapult last month, which concluded that energy retailers must “radically rethink” their approach to consumers and how they support them on the energy transition.

Raman Bhatia, chief executive of Ovo, said: “The UK energy sector is at a crucial point, and we need a resilient grid to get us through this winter.

“This trial provides essential consumer data which can be shared with the government and the National Grid to prevent power shortages, and will give customers a deeper insight into their energy consumption habits, with great potential savings.”

Ovo’s plans were released on the same day as the ESO’s Winter Outlook was published. It revealed that the demand flexibility scheme will have a capacity of more than 2GW over this winter.

However, some energy retailers have questioned that levels of payment ESO had put forward for participating in the scheme. Concern was raised that the 52p/KWh rate put forward by the ESO was too low to incentivise participation that the level and that it needed to be closer to £2/KWh. The ESO has since indicated it will raise the so-called guaranteed acceptance price but has not yet clarified the new amount. A consultation on the scheme closed on Monday (3 October).

Engaging consumers on flexibility will be one of the themes at Utility Week Forum on 8-9 November in London. Find out more here.