Pay people, not power plants

• Octopus Energy urges NESO to strengthen household flexibility as a grid service
• Gas power stations paid six times more than householders per unit of energy shifted
• Yesterday, two gas power stations were paid £17m+ for providing backup power – £5m more than householders received through the DFS in the whole of 2024
• Last year, 2m households benefited but this year it’s been crippled by bureaucracy. Fewer than 500,000 took part yesterday when it was needed most

London, 9th January 2025 - Octopus Energy calls on the National Energy System Operator (NESO) to strengthen the role of households in managing grid constraints, reducing the need to turn on expensive and polluting fossil fuel plants.

This plea comes after the system chose to pay over £17 million to two fossil fuel power plants for backup power amid a cold weather snap yesterday, instead of calling on the significantly cheaper Demand Flexibility Service (DFS).

The gas stations received payments of up to £5,750 per MWh of power generated between midday and 7pm. In stark contrast, households participating in Octopus’ demand flexibility scheme ‘Saving Sessions’ during the same timeframe were offered just £900 per MWh – over six times less.

Demand flexibility schemes such as ‘Saving Sessions’ allow customers to get paid for shifting their energy use out of times of peak demand, helping to balance the grid.

The £17 million paid to gas peakers yesterday was £5 million more than the total amount given to households through the DFS across the whole of 2024.

Last winter, customers received an average of £2,850 per MWh shifted. However, the drastic reduction in payments this winter has resulted in a 50% drop in household participation.

By increasing the rate offered to households, more customers would be encouraged to take part in the scheme, dramatically lowering balancing costs that are paid for by all billpayers.

Greg Jackson, Founder of Octopus Energy, said: “What happened yesterday is another example of our malfunctioning energy system. Millions of pounds were added to bills in just a few hours to pay a handful of gas power plants for a modest amount of electricity.

“It’d have been far cheaper to pay customers who chose to use a bit less instead. This was incredibly successful last year, but has been crippled by bureaucratic wrangling. Yesterday shows we need to redouble efforts to make the system work for customers, not against them.”

-ENDS-

Notes to editors:

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About Octopus Energy Group

Octopus Energy is a global clean energy tech business, driving the affordable, green energy system of the future. Under its own retail brand, Octopus delivers world-class customer service and cutting edge energy products to 9 million households globally. Its operations span 18 countries and the entire energy value chain. The group invests in, builds and flexibly manages renewable energy, operating a £7 billion portfolio of projects.

Octopus has licensed its advanced data and machine learning platform, Kraken, to support over 54 million customer accounts worldwide through licensing deals with companies such as EDF, E.ON and Origin Energy. Kraken enables Octopus to drive the electrification of heat and transport through smart tariffs and innovative cleantech. Backed by pension funds, investors and energy giants, Octopus Energy Group businesses deliver cheaper, greener energy and cutting-edge tech to countries and customers worldwide. For more information, check out our website.