Nov. 29 (Bloomberg) — The U.K. government will propose measures to encourage homes and industry to cut power use in a bid to curb bills and reduce the need for new plants.

The proposals, published as the government introduces legislation overhauling the electricity market today, include offering premium payments for each kilowatt-hour of power saved through measures such as efficient lighting, the Department of Energy and Climate Change said today in a statement.

Britain’s government wants consumers and industry to cut power use to lower emissions and keep a lid on bills after companies including Centrica Plc’s British Gas and EDF Energy Plc boosted charges. Cutting demand by 10 percent may save about 4 billion pounds ($6.4 billion) in 2030 and reduce demand by the equivalent power of five power stations, DECC said.

“We need to make our energy supply fit for the 21st century, and in a world of rising gas prices we must power our homes and businesses in a much more efficient way,” Energy Secretary Ed Davey said today in the statement.

The measures include financial incentives to replace less efficient technologies with newer equipment. The government will also consult on an “energy supplier obligation” to ensure suppliers reach a specific target of electricity demand reduction in the non-domestic sector.

Among the proposals are plans to incorporate demand reduction in the capacity market, a proposal introduced in the Energy Bill to pay generators for staying online to ensure security of supply. The Electricity Demand Reduction consultation, to be published at 11:30 a.m. today, will assess if people can participate in the capacity market by committing to reduce power use, lowering the electricity generators need to produce.

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