Octopus Energy has launched a time of use tariff that will pay customers to use electricity when there is too much power on the UK system.
At times of low demand, for example in spring and summer when around 12GW of solar is generating, or overnight at times of high wind, power prices can fall into negative territory due to over supply and generators can be paid to stop exporting power – simply because there is nowhere for it to go.
That is one of the reasons National Grid is looking at how to bring households and EVs into its flexibility programmes.
Octopus says its Agile tariff will pass on negative prices to customers by paying them to help balance the system. The firm will inform customers of a ‘price plunge’ event via text, email or online and give them a full half hourly breakdown of pricing and usage each month.
While Octopus is a domestic supplier, founder and CEO Greg Jackson indicated the firm is open to non-domestic customers taking on the tariff.
“If any businesses would like to sign up too we’d love to hear from them,” said Jackson.
“By reflecting the real cost of energy on the grid every half hour, customers can capitalise on times when prices are especially low. If the wholesale price goes below 0p/kWh, Octopus Agile will actually pay customers to take the unwanted energy from the grid. As renewable energy production grows these events are only going to become more frequent.”
The firm will publish half hourly power prices at 4pm for the following 24 hours, tied to wholesale costs, with customer charges based on half hourly consumption data from a smart meter.
Octopus says forward pricing will enable customers to schedule thing like electric vehicle charging at times of lowest cost, which may vary due to supply and demand on the power system.
It claims smart charging using the tariff could save EV owners hundred of pounds a year versus ‘dumb’ charging.