21st September 2019

What makes Octopus Energy so very green?

Matt Bunney, Head of Fuel Procurement

Green grass

Is Octopus Energy greenwashing?

Absolutely not. In fact, the Renewable Energy Association gave us their 2019 award for ‘the company that's done the most in the past year to advance UK renewables’.

As the greenwashing question has been coming up more and more recently, we wanted to set the record straight.

Renewable tariffs are becoming more affordable, and more large suppliers are starting to offer green electricity as standard. These changes signal a real advancement for UK energy as we work to fight the climate crisis. But along with the companies and people that are trying to do good by the planet, there’s also some who ‘greenwash’ – sowing of seeds of confusion to make themselves seem greener than they really are.

We can proudly say that Octopus Energy has no part in that. Let’s explore some of the many, meaningful ways that Octopus Energy is supporting a green future, right now.

  • We’re investing in solar energy on a massive scale.

  • Here, when we say “we”, we are referring to our parent company Octopus Group (the only shareholders in Octopus Energy are Octopus Group and our team). Octopus Group owns 100% of Octopus Renewables – the largest investor in solar energy in Europe. Octopus Renewables generate 4.1TWh (terawatt hours) of clean, green power annually – saving 3.6 million tonnes of CO2 a year.

    Skip to read more about Octopus Renewables.
  • We buy from many independent renewable generators and are actively encouraging more to market.

  • Our joint venture with Co-operative Energy has seen us team up with 73 small-scale generators directly, from solar energy to wind to hydropower, across the UK.

    Skip to read about our community energy mission.
  • We’re empowering householders (and soon, businesses) to generate their own solar energy by paying them for what they export to the grid.

  • As of April 1st this year, we are the UK’s only energy supplier to offer a smart way for people to get paid for the surplus solar energy they generate at home – what's called a smart export tariff, outgoingOctopus. In the gap left by the Feed-in tariff programme, people who’ve decided to install solar panels and generate green energy can’t get paid for it, unless they’re with Octopus.

    Skip to read more about our market-leading smart export tariff.
  • We’re heavily investing in cutting-edge technologies to form the building blocks of a low-carbon smart grid.

  • We are working our hardest to encourage the use of cheaper, greener energy during off-peak times when the sun is shining and the wind is blowing, and reduce the need for dirty, carbon intensive energy when the grid is most in demand.

    Think smart, fully-automated appliances that power up on cheap, off-peak energy. Electric vehicles that charge at the cheapest times of the night while you sleep.

    Skip to read more about this.
  • We're helping to counteract worldwide carbon emissions

  • We're three years into a mission to plant hundreds of thousands of trees to counteract carbon emissions and local air pollution. Plus, we’re partnered up with Renewable World, whose green energy projects provide safe, reliable renewable power in fuel-poor communities around the globe.

    Skip to read more.

Octopus Renewables and large-scale investment in green energy.

Our parent company, Octopus Group, are, through their subsidiary, Octopus Renewables, Europe’s largest investor in solar energy.

Octopus Renewables generate 4.1 terawatt hours of energy each year, mostly from solar, but also wind, hydro power, and a bit of biogas.

We’re distinct from Octopus Group through the simple fact that we’re part-owned by our people. Octopus Group owns 75% of Octopus Energy. The other 25% is owned by our staff (all full-time employees are shareholders, and that’s important to us.)

What’s the difference between Octopus generating energy under Octopus Renewables, and other green (sometimes called ‘deep green’) suppliers’ own-generated energy?

Octopus Renewables’ energy is sold on the open market, quite rightly, to provide more clean, green energy to the grid.

Practically speaking, we also need reliable, consistently sourceable energy for times when the sun isn’t shining and the wind isn’t blowing. So Octopus Energy buys energy on the open market alongside renewable energy ‘REGO’ certificates. These certificates go directly to support UK renewable energy generators. Each certificate accounts for 1 megawatt of renewable energy on the grid, and amounts to around £1.55 per customer – and as we head quickly towards 1.2m customers, that’s an injection of nearly £2 million every year directly into renewable generators, over and above the cost of “regular” electrons.

Here’s how Octopus generation/supply looks compared to a ‘deep green’ suppliers’:

Green energy supply chain Octopus Renewables

So our sister company (Octopus Renewables) are putting 4TW of green energy into the market. We're buying that amount of energy from the market alongside REGOs, to meet our customers' demand. It's an extra step in the process from green suppliers that directly buy from their own renewable generators – but at the end of the day, we're still generating and sharing green energy with the grid, supplying renewable energy to our customers, and investing in green generators through REGOs.

We also buy some of our energy directly from renewable generators through ‘Power Purchase Agreements’...

Supporting small-scale renewable generators and encouraging new ones to market

Our recent partnership with Co-operative Energy came about in part to spur on our mission to nurture local, small-scale renewable energy generation. We’ve now teamed up with more than 73 renewable generators around the country to provide over 110 gigawatt hours of sun, wind and hydro power to our customers.

This number will only grow as our Community Energy project makes links with more and more generators. In fact, (and we can’t go into too much detail here yet), we’re building an entirely dedicated company solely focussed on supporting community energy. Four people whose sole purpose is to develop and expand the industry. This is unparalleled in energy supply.

Blaen Dyar hydropower

Here's one of the small hydropower operations we've partnered with since August 1st this year – Llangattock Green Valleys

These sort of agreements (called Power Purchase Agreements) offer the kind of transparent supply chain we want to work towards. Our energy-buying money goes directly to the generators themselves, helping to grow the industry that will (soon, hopefully) power the whole UK with green energy.

Buying local is so important – we know that. Doing it in energy makes for a more efficient system, ultimately saving consumers money and strengthening small green businesses to boost local economies. The more support we can give to small generators, the more new ones will pop up in the market, and the UK’s energy grid will become less and less reliant on fossil fuels.

So that’s how we’re investing in renewable generation from a massive-scale to a community scale. We also want to empower individual people to generate their own energy – saving money and carbon, and making the grid greener.

We’re currently the only energy company in the UK to deliver the government’s Smart Export Guarantee (months ahead of deadline) and offer a smart way to pay people for solar micro-generation

Renewable generation big AND small is so important to creating a green, decentralised energy grid. We want to empower customers to generate their own renewable energy through home solar PV, and we think it’s only fair for them to get the benefits of this too.

Enter the world of the ‘export tariff’, an energy tariff that pays you for the renewable energy you generate at home and export to the grid. These tariffs encourage consumers to generate their own solar energy – by actually directly giving them the profits. Cheap energy for the people, and a greener grid for the UK at large.

Up until a few months ago, the government offered what’s called a ‘Feed-in tariff’ to do just this. Over 800,000 UK homes were generating their own solar power and getting paid for what they exported to the grid, but the programme ended on March 31 2019, leaving no incentive for people to install solar panels and start sharing their power with the grid.

From April 1st, we launched our own smart export solution to fill the gap left by the Feed-in tariff — outgoingOctopus. To date we have over 1000 customers signed up for the tariff, and (though through the Smart Export Guarantee the government has now mandated all large suppliers to follow our lead and offer an export tariff from January 2020) currently no other supplier in the UK can offer this.

Through our custom tech, we’ve been able to launch months ahead of the rest of the industry, and customers right now on outgoingOctopus are getting paid for their surplus green energy, helping the UK bit by bit towards a cleaner grid. What’s more, outgoing goes further, offering a dynamic price for the energy that changes half-hourly based on the market value of energy at that time – meaning you get paid more for sharing green energy with the grid at times when it’s most in demand.

This kind of dynamic pricing has MASSIVE implications for how we’ll use energy in the future. We’re working hard on tech products to bring on a fully automated, all-electric smart grid – the only way we can move to a Net Zero economy any time soon.

We invest heavily in cutting-edge technologies to form the building blocks of a low-carbon smart grid

As well as investing in new renewable energy generation, we need to reimagine the way our society consumes energy to make the most of the green generation we already have. And we’re doing that through our tech.

Dynamic energy pricing can lay the groundwork for a vastly different energy system. As Reuters put it:

One day, the weather could drive your domestic schedule. Your dishwasher springs to life at the windiest time of day. The washing machine starts spinning when the sun beats down.

We’re behind the UK’s first dynamically-priced smart electricity tariff – agileOctopus.

Catchup: How agileOctopus works

Agile forms the baseline for a wholly different way of using energy – a world where our energy usage follows renewable generation patterns (when the sun is shining, when the wind is blowing) so that we’re using energy when the grid is chock full of mostly green electrons. The tariff’s prices vary every half an hour throughout the day, depending on energy’s wholesale value. Wholesale prices are based on consumer demand (so, it’s super expensive at dinner time, and megacheap at 3am).

Sometimes, when there’s a massive amount of renewable power being generated, and not enough people to use it at the time, the wholesale price of energy even goes negative. That's when agile's Plunge Pricing comes in – customers on the tariff actually get paid for the energy they use at this time, saving it from going to waste.

With agile, and other smart tariffs like it, we’re experimenting to see if consumer habits can be changed if there's a financial incentive for using up perfectly good green energy at off-peak times when it might otherwise go to waste. As well as de-incentivising customers from using energy during daily peaks between 4-7pm when so many people want to use energy that the grid gets overloaded and has to rely on dirty fossil fuels.

There’s really nothing else like agile in the market today. The tariff was even named Digital Project of the Year at this years’ BusinessGreen Leaders Awards –

The judges were won over by Octopus' pioneering use of real time energy data and smart meters to deliver its Agile service, providing the world's first renewables powered time-of-use energy tariff and helping customers to curb energy use, cut bills, and maximise emissions savings.

A collective shift to using energy in off-peak hours would mean a cleaner, greener energy system. Obviously no one wants to get up at 3am to turn the dryer on when electricity is super cheap. So we’re also working on innovative automations and integrations so customers get the benefits of dynamic pricing without having to lift a finger, pairing up with everything from Amazon’s Alexa to IFTTT.

Whether it’s smart plugs , or smart chargers, or smart home apps – your appliances can be triggered to turn on based on how much green energy is on the grid, and how cheap it is for you, while you sleep.

We’re encouraging customers and other smart home/IoT innovators to automate with Agile via our public API, meaning the daily pricing data is freely available for anyone to play around with and hook up to neat new product integrations. We have a full time ‘Future Technologies Evangelist’, Phil Steele, who works day and night on ways to build an energy efficient, Net Zero smart home. Check out what Phil’s been up to on our blog.

We plant hundreds of thousands of trees, and fund Renewable World’s green energy projects in fuel-poor communities around the globe.

There are some emissions we’re not able to avoid completely, whether it’s non-green transportation or our customers’ gas usage for things like heating and cooking. For now, for a few ££ extra on your bill per month, we’ll offset any carbon emissions from the gas used in your home. We do this in a few ways, which you can read about in depth here.

We’re funding projects to bring cheap, green energy to fuel-poor communities around the world with the help of our partner Renewable World.

Bhaitari solar hub Renewable World

Renewable World bring low-carbon technologies, to areas with limited access to safe, reliable energy. It might mean installing solar lighting in a fishing community in Kenya reliant on dangerous, highly polluting kerosene lamps to do business. Or replacing a small town’s unreliable diesel generators with a solar micro-grid, empowering the community with access to energy that isn’t going to cost the earth.

The solutions Renewable World provides aren’t a one-size-fits-all. They are customised to have the most impact in the particular community, and they’re set up with the community’s help. As well as massively reducing carbon footprints by providing an alternative to fossil fuel power, RW’s projects empower local people to truly make the most of the new tech, enabling the creation of new businesses to boost the local economy.

We plant trees across the UK

In 2017, we launched a UK-wide community tree planting programme, working with schools and community spaces nominated by our customers to raise awareness for air pollution, increase biodiversity, and soak up carbon dioxide.

The first year, we planted 1,000 trees. In 2018, we planted 10,000. This year, we’re going bigger still – far bigger – in an effort to offset some of the carbon emissions we’re generating as a business as well as our customers’ emissions. Watch this space.

Grove Park planting
image of Matt Bunney

Matt Bunney

Head of Fuel Procurement

Hey I'm Constantine, welcome to Octopus Energy!