NG., GLO, DRX: Energy suppliers to watch amid plans to cut energy bills

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NG., GLO, DRX: Energy suppliers to watch amid plans to cut energy bills

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 NG., GLO, DRX: Energy suppliers to watch amid plans to cut energy bills
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Highlights

  • UK Households may potentially receive discounts on their energy bills by using less electricity at peak times.
  • After a fruitful trial, Nation Grid is planning to roll out its demand shifting scheme across the nation.
  • Millions of UK households could benefit from the scheme if more energy suppliers join it.

UK Households may potentially receive discounts on their energy bills by using less electricity at peak periods. Energy utility company National Grid (LON: NG.) has announced that after a fruitful trial earlier this year, it is planning to roll out the scheme across the nation.

The scheme was implemented in February and March, and it focused on incentivising households to use less gas and electricity during specific times in the day to avoid peak-time use and blackouts.

Under the trial, approximately 100,000 customers were offered incentives by Octopus Energy for reducing their energy consumption at certain times in the day. The households which successfully did the same were provided with the electricity and gas they used for free.

            Households being incentivised to reduce energy usage                                                                

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The main idea behind this move was demand shifting, which focused on incentivising households to alter the time at which they carried out activities needing higher power supply, such as charging an EV or using a washing machine. Smart meters, which measure energy consumption, played a crucial role in this.

The UK is headed for a rough winter with the Russia-Ukraine war threatening its energy security and has significantly raised the energy bills. National Grid ESO (electricity system operator) has recently held a webinar and is trying to find out the number of other energy suppliers that would potentially be a part of the national scheme. Reportedly, no formal responses have been received yet.

Millions of UK households could benefit from the scheme if more energy suppliers join it. The scheme would allow the flexibility of the system to increase, and consumers will be able to save more money while reducing their carbon footprint.

Let’s look at 3 energy utility stocks that may be impacted by the move.

National Grid plc (LON: NG.)

National Grid is a UK-based energy utility company that is engaged in transmitting and distributing electricity and gas. As of 28 June, the FTSE100 company holds a market cap of £38,655.37 million. The shares of National Grid have appreciated by 14.82% over the last one year as of 28 June, while its YTD return stands at 0.02%. With a price-to-earnings (P/E) ratio of 17.67, the company is currently offering an annual dividend yield of 4.8%. National Grid plc’s shares were trading at GBX 1,060.00 at 8:09 AM (GMT+1) on 28 June.

ContourGlobal plc (LON: GLO)

ContourGlobal is a leading power generation company in the UK. As of 28 June, the London-based company holds a market cap of £1,656.76 million. The shares of ContourGlobal have appreciated by 30.55% over the last one year as of 28 June, while its YTD return stands at 32.18%. With a price-to-earnings (P/E) ratio of 26.06, the company is currently offering an annual dividend yield of 5.7%. ContourGlobal plc’s shares were up by 0.20% at 9:16 AM (GMT+1) on 28 June, standing at GBX 253.00.

Drax Group plc (LON: DRX)

Drax Group PLC is a UK-based power generation company that additionally manages a global biomass supply chain business. As of 28 June, the company, which is listed on FTSE250, holds a market cap of £2,564.34 million. The shares of Drax Group have appreciated by 50.17% over the last year as of 28 June, while its YTD return stands at 5.29%. With a price-to-earnings (P/E) ratio of 49.59, the company is currently offering an annual dividend yield of 2.9%.

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