Smart meter owners will be grateful recipients of payments from National Grid if they reduce their electricity consumption at peak times during the current cold spell (Households in Great Britain to be paid to use less electricity: how does it work?, 23 January). While this might help keep the lights on, the risk is that low-income households who are already not consuming as much energy as they need to protect their welfare will take the opportunity to boost their income at the expense of their health – using the money to eat rather than heat.
However, there is a potential stick to go with this carrot and that is the option of charging consumers more for electricity at peak times. This will only be possible when all consumers have smart meters. It is proving hard enough to convince consumers to install them without downsides becoming apparent. As with the current scheme, power demand will be reduced at peak time. However, instead of giving consumers money to do this, they will be penalised if they do not and the welfare consequences in terms of increased excess winter deaths, already far too high, will be serious. The sensible course would be to prohibit use of high prices to reduce electricity demand at peak times.
Emeritus professor of energy policy, University of Greenwich