Where does our 100% green electricity come from?
Choosing Octopus Energy as the energy supplier for your home or business means choosing to support a green energy future. The money from your bills goes towards investment in renewable energy generation in the UK – making your home greener, and helping to transform the whole energy system with our cutting-edge green tech.
We’ve written at length about all the work we’re doing to create a cleaner, greener, smarter energy system in our blog, What makes Octopus so very green? Here, we want to get into the specifics of how we buy green energy for our customers.
- What does it mean to choose a green energy supplier?
- Find out about our own green energy generation
- Meet some of the fantastic independent green energy generators we work with
- Why can't the UK's energy system currently support 100% direct green generator contracts?
- Do any energy suppliers currently supply 100% PPA-backed renewable energy?
- How we’re working to transform the energy system to support 100% green power for all
- All about Renewable Energy Guarantee of Origin (REGO) certificates
What does it mean to choose a green energy supplier?
It’s important to remember that when you sign up with a renewable energy supplier, we don’t pump green energy through a separate ‘green grid’ straight to your home. Instead, all energy sources – whether “green” or “dirty” – get mixed together when they’re fed through the wires that lead to your home.
100% green suppliers support green energy generators, who pump renewable energy into the grid to replace the energy that customers take out (making the ‘energy mix’ greener in the process).
There are several ways suppliers can do this: they can build our own generators to generate their own power, purchase green power from independent generators with contracts called “Power Purchase Agreements” (PPAs), or, buy green energy certificates that go towards supporting green generation, alongside power from the grid.
What do we do?
A bit of each – we have PPA agreements with over 100 different solar, wind, and hydro plants across the UK, including a wide range of community generators, and Octopus Energy Generation (part of the Octopus Energy family) manage over 300 renewable energy projects generating 2 TWh of green power and making us Europe’s biggest investor in Solar Energy. We also need to be able to supply our customers with reliable, consistent energy when the sun isn’t shining and the wind isn’t blowing, so besides the energy we source from Octopus Energy Generation's renewable projects and our community generators, we also get a portion of energy from the open market alongside renewable energy ‘REGO’ certificates. On top of Octopus Energy Generation's massive contribution, these certificates also go directly to supporting UK renewable energy generation.
This way we ensure green energy is going into the grid to 'pay back' what our customers take out, making the energy mix cleaner for all.
We have a bigger mission, even more important and urgent than giving customers green power today.
We’re transforming the energy system so that the whole nation (the whole world, really) can run on renewable energy alone.
Currently, even if we were able to generate vast amounts of wind, solar and hydro energy, chances are, we still wouldn’t be able to power the world this way – right now, we wouldn’t be able to access that energy when we need it most, because we're running it through a system that was built to support fossil fuels.
For that very reason we're creating the building blocks for a smarter, decentralised, more flexible system, capable of handling 100% renewable power.
Progress is already being made to make this system a reality – customers are, right now, living a future where they get cheaper energy when the wind blows and the sun shines. But we want the accelerate the shift even faster, so we're experimenting, with tentacles in many small, diverse projects to empower smaller green energy generators and EnTech disruptors, as opposed to those with enormous assets.
We generate our very own green energy
Octopus Energy Generation
In 2021, we acquired Octopus Renewables, Europe’s largest operator of renewable energy. Octopus Energy Generation now operates more than 300 renewable energy projects across six countries with a total capacity of 2,800 Megawatts, including rooftop solar farms in Manchester and Birmingham and as wind farms in South Lanarkshire and Northamptonshire. Last year those renewable energy farms generated enough energy to power over 1.2 million homes.
A portion of the total green energy we send to the grid to make up for the energy our customers use comes from Octopus Energy Generation. Click here to read more about Octopus Energy Generation.
Octopus Fan Club
Allow us to introduce our two biggest fans:
#1 Fan in Market Weighton, East Yorkshire and #2 Fan in Caerphilly, South Wales. That's right, Octopus Energy we now have wind turbines of our very own! This is the UK’s first energy tariff to give customers the benefits of local renewable energy production in real-time. Octopus customers in Market Weighton or Caerphilly can join the Octopus Fan Club for £1 a week, and enjoy much cheaper 100% renewable electricity whenever their local turbines are spinning.
We’ve recently teamed up with trailblazers Ripple Energy to supply customers with energy from the UK’s first consumer-owned wind farm.
In the first large scale project of its kind, we’re working with Ripple Energy to democratise energy, offering people the chance to buy a share of a turbine. In exchange, they'll get access to the electricity it produces – and we’ll be supplying that energy. This is one big we love working directly with generators – there's room to try all sorts of innovative, groundbreaking new ways to generate and supply renewable energy.
Meet some of the fantastic independent green energy generators we work with
The first way we support renewable generation is by paying renewable generators to pump energy into the grid directly. We currently purchase the energy generated by 102 solar, wind, and hydro plants directly, through what are known as Power Purchase Agreements (PPAs), and our PPA portfolio is growing all the time.
Octopus Energy's PPAs
Of our 102 PPAs, 26 are 'standard' Octopus Energy Power Purchase Agreements with Octopus Energy Generation's sites and other renewable generators. We purchase the solar, wind, and hydro energy they generate directly. During peak generation periods, these sites could collectively power 80,000 UK homes. Here are a couple of the sites we partner with!
Hill End Farm, Hampshire
This solar farm is set on a large plot of farmland in the Hampshire town of Sherwood St John. The local council decided to transform this regular bit of farmland into a solar site in 2014 (check out a picture of the farm's construction below). Hill End generates three megawatts – enough renewable power to save around 1,375,220kg of CO2 emissions per year.
You can literally see it on Google Maps right now, here:
Carditch Drove, Somerset
This solar farm sits just outside of Bristol, and generates a whopping five megawatts of solar energy. That's enough electricity to power an average of 1,812 homes every year. We've been happily working together since early April 2020.
Co-Op Community Energy
All over the UK, there are local energy groups which allow communities to invest directly in renewable energy generation in their neighbourhood and beyond – whether it’s from solar panels on rooftops, wind turbines on farmland, or hydropower from the local river.
In 2019, we joined forces with Midlands Co-operative, combining our tech agility with their wealth of community generation experience to form a new venture: Co-op Community Energy.
This has enabled us to invest deeply in community energy generation across the UK, forming PPAs with an ever increasing number of projects to purchase the green energy they generate for a fair price. The rest of our 76 Power Purchase Agreements are with these community energy generators. Not only do we support small local sustainability leaders – but the revenue they receive often goes towards community initiatives, like nature conservation, or reducing CO2 emissions with insulation for homes in disadvantaged areas. Co-op Energy customers can even join a special Community Power tariff to get their energy straight from these projects.
Here are just some of the community energy projects that we support through Co-op Community Energy:
Osney Lock Hydro
Osney Lock Hydro was the first community-owned hydro scheme to be built on the Thames. It generates more than 179,000 kWh of clean electricity annually. Our founder Greg went to visit the site along with some legendary leaders in community energy to launch our exciting new project…
West Mill Wind and Solar Farm
This venture was born when an Oxfordshire community banded together to develop renewable generation on local farmland. Their wind and solar generation is enough to power 4,500 homes, and 100% of this renewable energy is purchased by Co-op Community Energy. A large proportion of the profits go straight to the Westmill Sustainable Energy Trust, who promote energy efficiency and provide grants to others who can help advance renewable projects.
Oxford Bus Company solar
An inspiring local team installed 540 solar panels on the roof of Oxford Bus Company’s HQ, getting the funding for the panels by selling shares to like-minded members of the community. The profit from selling their surplus green power has gone towards creating over 40 similar renewable energy projects.
The way the energy system is set up currently means there’s no advantage for a local community to purchase local produced energy. While not strictly a PPA, as part of our mission to make greener energy, cheaper energy, we've partnered with Energy Local on a BEIS-funded research project. We provide the technical expertise, enabling community energy clubs like Crickhowell and Bethesda to reap the financial benefit of buying renewable energy locally. The scheme works by bypassing transmission and distribution costs (which actually make up a higher portion of our bills than the energy generation itself). If you’re interested in learning more, you can check out this Energy Local blog.
Why can't the UK's energy system currently support 100% direct green generator contracts?
The nature of the UK’s energy system means we can’t currently source all our energy from direct renewable PPAs. So instead, we’re building technology to change the system itself.
The UK's ancient energy system was built around fossil fuels. Dirty energy sources, like coal, gas and oil, work really differently to renewables – they can be pumped and burnt in whatever quantity we need to meet demand. Green sources, on the other hand, are clean but intermittent. This means they're abundant at certain times (i.e., when the wind's blowing), but scarce at others (no solar power overnight!). With its current set up, the UK’s energy system can’t handle large quantities of intermittent PPA-backed renewable energy.
With that in mind, we’re laying the groundwork for a smarter, greener grid, capable of intelligently supporting 100% ‘intermittent’ renewable sources (i.e. energy that’s only generated at certain times of the day).
It would currently be impossible for us, and other large suppliers across the UK, to switch to 100% PPA backed renewable energy – we wouldn’t be able to match up generation and demand. There would be tonnes of renewable energy available at points in the day where nobody wanted it, and so generators would frequently have to shut off to avoid damaging the grid's infrastructure – wasting all that green energy. (This has actually already happened several times over the last year.)
What’s more, during peak hours when many people are using power at the same time, we STILL wouldn’t be able to meet demand, and so we’d STILL have to rely on turning on other, dirtier fuel sources at these times to avoid power cuts.
Still, a world powered by 100% green energy isn’t out of reach - we’re just going to have to learn how to make the most of it.
At the moment, there’s still room in the grid for more renewable generation (which is why we’re always looking for more PPAs with renewable generators). But expanding investment in renewable generation won’t be enough – before we get to a place where we can supply all of our 2 million customers this way, we’ve got to create a system that allows us to leverage renewable energy when we need it.
Do any energy suppliers currently supply 100% PPA-backed renewable energy?
It’s worth noting that a few suppliers do supply 100% of their energy from renewable PPAs. Between them, these companies only supply a few hundred thousand customers – and there's not much room for many more to supply energy like this without the kind of massive system transformation we’re driving.
So, choosing a supplier like this is a great way to directly support renewable generators, but it doesn't help solve the wider issue at hand: changing the system for the future, so the many (not just the few) can benefit.
It also works against the idea that renewable energy can be cheap energy. Because these energy suppliers have to work so hard to match up their directly procured intermittent PPAs with their customers’ demand (especially at points of the day when renewable generation are scarce) their bills end up being several hundred pounds a year more expensive.
We have to bulk-buy energy in advance to ensure we can offer affordable rates – hedging how much energy we think our customers will need over the course of a year. We can do this fairly well, thanks to years of historic energy usage data and some pretty clever people. However, with PPAs, it’s really challenging trying to predict how much the sun will shine and the wind will blow each day (and therefore how much solar and wind energy will be generated) – particularly on a given day three months from now. Thanks to our legacy system, without a way of storing energy – under, or overestimating the amount we need is also incredibly risky and super costly.
How we’re working to transform the energy system to support 100% direct green power for all
We’re focusing on system-wide change to drive the transition to a smart, flexible grid that can handle 100% renewable PPA backed energy FOR ALL, rather than focussing on supplying (expensive) green power for a small number. This means addressing the need for flexibility that comes with an intermittent energy supply.
First, we’re working hard to change consumption patterns, rewarding customers for using energy when renewables are most abundant, and reducing consumption during those pesky daily ‘peaks’ in demand that renewable generators currently find more difficult to address.
One way we do this is with our Agile Octopus tariff. Agile provides super cheap (and sometimes negative?!) prices when demand is lowest and energy is greenest, rewarding customers massively for shifting their energy use outside of the 4-7pm daily peak in demand, when prices are higher. (You can see this in the graph to the right). We’re also investing massively in smart home tech, like smart thermostats, timers, chargers, and heating, so you don’t have to get up in the middle of the night to make the most of this cheap, green energy. Read more about smart tech in tech section of our blog.
Similarly, we’ve recently been running experiments to help other customers make the most of excess green energy. During our recent Big Switch On, it looked like the grid was going to have to pay green generators to shut off and waste their energy, so we paid customers to turn on their appliances and help use up those renewables instead.
We’re also looking at interesting ways to store cheap, green energy when it is abundant, for use later on. This way, greener energy can be used to address the daily peak instead of relying on fossil fuels to meet demand. With this in mind, we’ve long championed home generation and storage: in April 2019, we became the first supplier to enable people to get paid to generate their own electricity with our outgoingOctopus export tariff. These tariffs allow homes to run on energy they generate before drawing on the grid, and even sell excess green energy back to the grid to help balance out daily peaks in demand. And last year, with our Panel Power tariff, we became the first supplier to enable businesses to do the same.
We’re also working with smart home battery manufacturers like PowerVault and Tesla’s Powerwall. Their home storage devices allow you to fill up on cheaper, greener energy (either from home solar generation, or from the grid when it’s at its cheapest and greenest). You can then store this energy for use in the early evening when energy is dirtier and more expensive. When used alongside our Agile Tariff, studies suggest that a Powervault battery can save the average customer up to £270 to 580 per year, even without home solar generation!
In a similar vein, we’re also championing Vehicle2Grid charging. Our Powerloop scheme enables Electric Vehicle owners to charge up on cheaper, greener energy overnight, drive around all day, and then discharge the energy in their batteries back to the grid after work (in exchange for payment). This helps to re-balance the grid with stored green electricity, rather than having to rely on fossil fuel generators.
In 2018, we worked with long time partner Arsenal Football Club to install a 2 MW battery in the Emirates stadium. Arsenal’s evening games now run on battery power, easing strain on the grid by the equivalent of several thousand household’s worth of energy. If demand is high and there’s no game on, the stored power is fed back into the grid to help beat that troublesome, carbon intensive daily peak.
Finally, thanks to our recent investment from Origin, we've been able to move forwards with a longtime dream of ours. We're setting up a Future Energy Research Centre to share data, modelling and speed up the transition to the kind of flexible, easily balanced, all electric smart grid that can support 100% renewable PPA power.
Renewable Energy Guarantee of Origin (REGO) certificates
Besides our direct contracts with renewable generators, and our work unlocking 100% PPA-backed renewable power, in the meantime, we also support renewable generation in other ways.
It’s difficult to track exactly how many green electrons are whizzing through the grid at any given moment, so for every megawatt of renewable electricity generated, the energy regulator – Ofgem – also gives generators a Renewable Energy Guarantee of Origin (REGO) certificate. This is how the Government measures how much renewable energy has actually been generated. Aside from the energy they generate, renewable generators can also sell these REGO certificates as an additional source of income, which can then be reinvested into more green generation. With that in mind, another way a green supplier can ensure a 100% renewable energy supply is to buy enough of these REGOs to cover their customers’ energy usage, alongside energy from the wholesale market.
Every year, energy suppliers have to publish where they’ve sourced their electricity from (their ‘Fuel Mix’). When it comes time to disclose this Fuel Mix, suppliers use the REGOs they’ve purchased as proof of their renewable credentials. You can see our fuel fix here.
100% green energy suppliers can purchase enough certificates to cover their customers’ energy usage, and then buy energy wholesale to show that for all the energy a customer uses, another megawatt of renewable-backed energy has been pumped into the grid. We buy enough of these certificates to cover every single unit of energy our customers use. This also ensures that we can supply a steady stream of renewable-backed energy 24/7, when the sun isn’t shining, and the wind isn’t blowing.
And that’s all buying green energy means, anyway – because all generation is mixed on the grid, buying “green” just means you’re paying for a commitment by your supplier to put green electricity into the grid to cover what you use, ultimately “greening” it up so the UK’s national fuel mix slowly heads towards carbon neutral.
Where would we be without REGOs?
Given that there's a separate market for buying REGO certificates on their own (as opposed to buying them alongside the renewable energy they represent), some argue that there’s less of a clear, traceable line from source to supplier to consumer, or that suppliers aren’t really encouraging as much new renewable generation. These certificates represent renewable fuels that have already been generated rather than buying new energy to feed into the grid.
To that, we say....
REGOs can only exist if a megawatt of renewable energy has been generated. They might not have such a direct source, but behind every REGO, clean, green energy has been generated in the same amount to power people’s homes, and buying those REGOs is another way to support generators so that they can produce more renewable energy.
If we take a second to think about where we’d be without REGOs: renewable generators would lose an important source of income; renewable tariffs – based purely on PPAs – would be incredibly expensive, inaccessible to all but the wealthiest people (so it would be much harder to drive widespread green consumer change). Plus, once again, our legacy grid would still only be able to handle a relatively small number of customers from PPA-only suppliers.
For the moment, REGOs are a reliable way of ensuring 100% renewable energy. We believe they're a good first step in the journey to 100% green energy, and get people used to the idea that you can go green without breaking the bank.
So for now…
We fulfil our 100% renewable energy promise by offering a steady supply of green energy at affordable prices. through a combination of:
1) Investing in green generation at scale through Octopus Energy Generation, Europe’s largest operator of renewable energy
2) Generating own green energy, starting with the Octopus Fan Club
3) Buying energy through direct contracts (PPAs) with independent renewable generators
4) Buying Ofgem-issued REGO certificates, each signifying a megawatt of renewable energy they’ve generated already and giving additional investment to generators to further their green energy capacity.
We always have our eyes on ways to ensure a more traceable, direct, and transparent energy procurement process, and at the same time, we’re looking to the future, leading the UK’s transition to the kind of smart, flexible, all electric grid that would make 100% renewable energy a reality.
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