The energy regulator has approved a scheme that will see households and businesses taking part receive financial rewards for saving power at times of peak demand.

National Grid ESO, which operates the country’s electricity network, said Ofgem had backed its plans for the Demand Flexibility Service (DFS) for the winter.

The scheme is designed to help prevent power blackouts, which National Grid has previously warned are a risk over the coming months given the squeeze on gas supplies across Europe as a result of Russia’s war in Ukraine.

While seen as unlikely, a prolonged cold snap could mean power demand exceeds supply.

Contingency plans are in place for three-hour blackouts in that event.

The DFS is the first line of defence.

It is to be tested for the first time in the coming days to demonstrate its effectiveness.

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It will see households and businesses, which must have smart meters to qualify for the scheme via their supplier, told in advance that they should avoid using energy intensive appliances in a certain evening hour on a particular day.

There will be at least 12 such ‘demonstration days’, National Grid said, to make the scheme worthwhile for signatories.

They alone could earn the average household up to £100, a welcome sum as families battle the energy-led cost of living crisis.

Industrial and commercial businesses with larger energy usage could save multiples of this sum.

There is the potential for more savings in the event the DFS is actually needed, to help prevent blackouts.

Fintan Slye, the ESO’s executive director, said: “We are delighted that Ofgem have approved the use of our Demand Flexibility Service this winter.

“It will help mitigate the potential risks that the ESO has outlined in its Winter Outlook and will allow consumers to see a financial return for reducing their electricity use at peak times.

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“As a responsible operator of the electricity system, we have developed this innovative Demand Flexibility Service to compliment the robust set of tools we already use to balance the electricity system every day.”

A separate National Grid Gas Transmission study suggested that the country would be relying more on LNG (liquefied natural gas) supplies from the US and Qatar this winter.

That is because of uncertainty over whether traditional EU imports would be available because of the squeeze on supplies in the bloc following Russia’s war in Ukraine – intensifying pressure on the UK power grid as a result.