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Free electricity on Saturdays? Offer could come to UK

Holly Ellyatt and Matt Clinch
Thursday, 1 Aug 2013 | 7:41 AM ET
Scott E Barbour | Photodisc | Getty Images

U.K. homes could soon be powered for nothing at the weekends, if radical plans by energy supplier British Gas are implemented.

The company — owned by British multinational utility company Centrica — said it was considering reducing the strain on the power grid by offering free electricity to customers on Saturdays, when demand is weaker.

Speaking at Centrica's presentation of its half-year results on Wednesday, chief executive Ben Laidlaw said the free tariff, which is already offered to customers in parts of the U.S., could be trialed in the U.K.

Laidlaw told the Telegraph newspaper that the free tariff could be launched for U.K. customers by mid-2014.

"We are some distance away from getting all the systems in place," Laidlaw said, adding that the scheme was just rolling out in Texas. "We want to see how well it works in Texas," he said.

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For the free tariff policy to be instigated, all consumers would need to have "smart meters" installed, which would send automatic readings back to suppliers. British Gas has installed one million smart meters in U.K. homes so far, but by the end of the decade every home is expected to have one.

For those U.K. homes without a smart meter, energy companies use a cruder, estimated usage measure to calculate household energy bills.

"There is no way at the moment of differentiating pricing for different times of day or different times of the week. Using smart meters would be a way to do that," Peter Atherton, an energy analyst at Liberum Capital, told CNBC.

"You can then provide more nuanced tariffs, like the one Centrica is suggesting, whereas at the moment there's just one wholesale price, whether you use energy at peak time or at 2 a.m. in the morning," he added.

Atherton said Centrica's "free electricity" tariff was an "interesting idea, and it works well in the U.S. where it's popular with customers".

Under the proposed scheme, customers would get 24 hours of free electricity every Saturday, by agreeing to switch more of their usage to the weekend. However, the scheme does not extend to gas usage, the major part of household energy use, according to a BBC report.

The tariff for energy usage during the rest of the week, under the scheme, has yet to be revealed. Some analysts said the scheme could encourage higher electricity usage at a time when cutting carbon emissions was a priority.

"We will think very carefully about how we launch it [in the UK]," Laidlaw told the Telegraph.


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