Energy saving smart grid technology has been installed on the Orkney Islands, which the Department for Energy and Climate Change (DECC) has said will reduce power wastage.

Deployed by Smarter Grid Solutions in partnership with Scottish and Southern Energy, the technology will add 15 MW of renewable generation capacity.

A spokeswoman for DECC said that the grid could be used in conjunction with smart energy meters to offer savings to consumers.

For example, she explained that it could be possible to get a cheaper tariff from energy companies by switching to wind power at night in areas which tend to be more gusty.

"If you've got a smart grid it's a much more efficient grid in terms of generation to the consumer," she added.

Her comments come after chancellor Alistair Darling revealed plans for encouraging the uptake of energy saving measures in the Pre-Budget Report.

People with a home wind turbine or solar panels who plug their excess power into the national grid will receive on average £900 a year from April 2010, he said.