As rising energy and gas bills concern many families, one energy supplier has predicted that households could earn £100 over the winter months using a scheme to reduce peak-time use.

It comes as energy supplier, Octopus Energy said its 1.4 million customers with smart meters will be able to sign up for the voluntary scheme.

The supplier expects to pay customers an average of £4 per kilowatt hour (kWh) of electricity they save when asked.

The scheme will be announced in full detail by the National Grid later this month and will be available to all energy suppliers.

If energy supplies were to adopt the scheme, it could see some customers save as much as £10 a day, according to the grid operator.

Bournemouth Echo: PAPA (Image: PA)

New scheme to be launched to help households save on energy bills

If you sign up you will get a text to say that if you use less electricity between certain hours later that day you will be paid.

It is only during these hours that you will be paid for reducing your usage compared with a normal day.

The National Grid Electricity Systems Operator said the system will be trialled at least 12 times over the winter, but there are likely to be more as needed

The cash incentive is to encourage families to use electricity at low peak times, asking people to run their washing machines, tumble dryers, and dishwashers and not to charge their electric cars when demand is already high.

The scheme is set to start next month and will run until March 2023 and is in aid to help the UK avoid blackouts.

Following news on Thursday from the National Grid that warned homes, they could face three-hour rolling blackouts if the UK was unable to secure enough gas and electricity imports during the colder months.

Much of the UK relies on gas to generate electricity, however, the war in Ukraine has resulted in pressure on gas supplies across Europe.

Earlier this week, Downing Street turned down running a campaign created by the business ministry that would persuade households to use less electricity.

However, the new National Grid scheme will show how much it will pay per kilowatt hour for people cutting back when there is a cutback on supply.

As Octopus chief executive Greg Jackson said "Instead of cutting off whole chunks of the country if we are short of gas, we can reward people for using less energy at times of peak demand."

The payback scheme will be available to all homes that have smart meters installed if their supplier is taking part in the service.

Earlier this year, Octopus Energy ran a trial scheme where they found there could be 25 days over the next six months if the National Grid is willing to pay households to reduce their use.