£20m for firms to cut energy use

Decc announces £20 million pilot scheme that will pay organisations to reduce their electricity consumption

Businesses will be able to bid to be paid by the government for “negawatts” – megawatt hours (MWh) of electricity saved – from next summer, the energy secretary Ed Davey has confirmed.

The electricity demand reduction pilot scheme, which is set to run for two years, will see organisations paid for lowering their electricity use through an auction system.

Companies installing energy saving measures, such as more efficient air conditioning and lighting, will be able to bid for payment based on the amount of electricity they can save and the price they are willing to accept to deliver those savings.

The scheme is “worth at least £20 million”, claims Decc, and will support a wide range of efficiency measures.

The pilot forms part of the government’s plans to reform the UK’s electricity market and follows amendments being made to the Energy Bill to address the lack of incentives to support energy efficiency in the first draft.