Britain Awards Firms Cash to Turn the Power off This Winter

British companies operating at 431 sites in Britain have won contracts under a scheme that will pay them not to use electricity during some hours on week days in November to February, National Grid (NGG) said on Tuesday.

Britain risks an electricity crisis this winter after several power plants in the country were hit by unexpected outages, forcing grid operator National Grid to take precautionary measures.

It said on Tuesday companies operating at 431 individual sites, including some plants owned by Europe's second-largest steel producer Tata Steel, had been awarded contracts under the so called Demand Side Balancing Reserve (DSBR).

"We are encouraged by this first tender round and we think that the extra security these contracts provide is good value for consumers," said Peter Bingham, senior manager, National Grid, in a statement.

National Grid said later a total of 12 companies had been awarded the contracts. These included aggregating firms which separately signed up individual factories or offices at different sites.

It launched the tender for up to 330 megawatts (MW) in June, asking offices and factories to shut down from 1600 to 2000 GMT on week days during the months with the highest demand so that power could instead be diverted to households.

Under the scheme the successful firms will be paid a retainer for the period, even if they do not need to turn their power off, and will be paid more for not using electricity if they do shut down.

The grid operator would not give a figure for how much the firms would be paid under the scheme.

The contracts awarded could save up to 319 MW of capacity - or a little more than half the capacity of a typical power plant in Britain - during peak times.

The grid operator has also announced a scheme to encourage utilities to make idle capacity available this winter, something it had not planned to do until next year.

There are ongoing outages EDF Energy's Heysham and Hartlepool nuclear power stations while fires at E.ON's Ironbridge and SSE's Ferrybridge power plants have reduced both their output.

The outages will also mean greater reliance on imports from Europe where operators face their own supply constraints.

(Reporting by Susanna Twidale; editing by Susan Thomas)