More than 1.2 million customers of Octopus Energy were offered payments to reduce their electricity consumption between 7.30pm and 8.30pm on a recent Tuesday evening, as soaring temperatures sent power demand higher. The scheme is likely to be repeated on other hot days by multiple energy retailers to shift demand away from the peak tea-time period.
Heatwave strains Britain's energy system
The move by Octopus came as Britain was forced to pay vastly inflated prices for imported electricity from Europe after a combination of scorching weather, weaker wind generation and outages at gas-fired power stations tightened supplies. According to reports, the National Energy System Operator paid around £470 per megawatt hour for electricity imports during Tuesday evening's peak period – more than six times the average wholesale price seen in June last year.
Under Octopus Energy's latest "Saving Session", customers could earn the equivalent of 52p for every kilowatt hour of electricity they cut during the designated hour. The supplier said the event was designed to help balance the national grid at a time when demand is surging and available generation has been squeezed.
Unusual summer challenges
The heatwave has created an unusual summer challenge for energy suppliers. While demand typically peaks during winter, higher temperatures have increased the use of cooling systems, fans and refrigeration equipment across homes and businesses. At the same time, a number of gas-fired power stations have suffered heat-related problems. According to consultancy LCP Delta, five gas plants reduced output because of extreme ambient temperatures, removing around 2.5 gigawatts of capacity from the system – enough electricity to power about 2.5 million homes.
With wind speeds also falling during the high-pressure weather system, Britain has been forced to rely more heavily on imported power.
Octopus customers support the grid
Octopus said 1.8 million customers on smart tariffs and flexibility schemes were helping support the grid during the heatwave. The supplier estimates that as much as 4.5 gigawatt hours of demand could be shifted away from peak periods through its network of around 440,000 connected electric vehicles and home battery systems.
Greg Jackson, founder of Octopus Energy, said: "Our customers are proving that a modern, flexible green grid is happening right now. Faced with a heatwave and unexpected grid constraints, over a million British homes are happy to shift their usage, and move their charging to different times, and get paid for doing so."
Routine balancing measures
The National Energy System Operator stressed that such balancing measures are a routine part of running the electricity system. A spokesman said: "While the hot weather has affected electricity market prices in Great Britain and across Europe, balancing actions of this nature are a routine part of operating the electricity system."
The latest events underline how Britain's electricity network is increasingly relying on households to help smooth out demand peaks as the country transitions towards a more flexible energy system. Octopus says it has paid almost £6 million to customers through its Saving Sessions scheme since its launch, while customers on smart tariffs have collectively saved around £1 billion by shifting their electricity use away from peak periods.
