Octopus Energy launches time of use tariff, targets businesses as well as households

2

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.

Related stories:

National Grid to focus on bringing smaller firms, EVs and households into balancing

As solar generation makes history, National Grid starts to feel the burn

Northern Powergrid: EVs a resource, not a problem

EVs ‘could provide 11GW of flex’

Lord Redesdale: Idea of EVs as energy storage is “complete crap”

Carmakers become aggregators as DNOs fear overnight EV boom

Nissan: Carmaker signals roadmap to energy services company

Flexitricity chief: UK has enough spare power electrify every car on the road

Solar PV hits 11.5GW in 2016

National Grid procures 138.6MW of demand turn up to balance solar in summer

National Grid to extend demand turn-up running hours, procure more

Greg Clark calls for carmakers and energy firms to deliver battery storage

National Grid mulls rolling all frequency balancing services into one scheme

National Grid says impact of solar requires greater system flexibility

Battery storage: Positive outlook or does a correction loom?

Open Energi and Camborne Energy Storage take Tesla battery into frequency response market

Scottish Power asks Ofgem to change classification of batteries in capacity market

Centrica: Floodgates to open on battery storage this summer

UK Power Networks receives 12GW of battery storage applications in 15 months

National Grid boss: future of energy is demand not supply

National Grid says impact of solar requires greater system flexibility

Restore signs 25MW demand turn up deal with National Grid

Flexitricity launches demand turn up service

Demand turn-up: What worked, what didn’t?

Western Power Distribution ramps up demand-response trials, calls for participants

Smart grids ‘require local control and businesses must play or pay’

More than half of I&C firms mulling energy storage investment

National Grid says UK will miss 2020 targets, predicts big battery future

Free demand-side response report

Click here to see if you qualify for a free subscription to the print edition of The Energyst, or to renew.

Follow us at @EnergystMedia. For regular bulletins, sign up for the free newsletter.

 

2 COMMENTS

  1. “At times of low demand, for example in spring and summer when around 12GW of solar is generating …”

    Our 12GW of solar has never actually generated 12GWh during a 1-hour period, has it?

    ‘Peak’ solar generation lasts just a couple of hours on a very sunny day.

    Disingenuous to fail to mention relative price during our month of peak demand when that 12GW of solar operates at a pathetic ~2% capacity factor.

    In addition, there’s the very real prospect of a winter lull lasting an entire week or more, when 17GW of turbines operate at ~10% capacity factor.

    To paraphrase Greg Jackson “By reflecting the real cost of energy on the grid every half hour, Octopus can capitalise on times when prices are extremely high.”

  2. Agree with Joe Public. Plus the fact that the system price will actually have to go somewhere below -£55 to cover the non-energy costs before you could even think about ‘paying customers to use energy’. Also dependent on smart meters, and as an existing Octopus customer, who can’t read the smart meter I inherited from Eon yet, I feel they have some way to go. All that being said, Time of Use tariffs is the way forward, and good for them for publicising the issue, for all it looks a bit gimmicky at the moment

LEAVE A REPLY

Please enter your comment!
Please enter your name here