Interesting! Reposted from Edie:
Octopus to offer free electricity during periods of low demand, excess renewable generation
Electricity supplier Octopus Energy is set to provide customers with free electricity during periods of low demand and high generation, in a bid to stop renewable generation from being curtailed.
Published 15th August 2024
Image: Octopus Energy
The ‘Free Electricity Sessions’ have been made available this week to customers already registered under the ‘Octoplus’ rewards scheme. Scheme membership requires a smart meter.
Under the scheme, customers will benefit from free electricity when the wholesale price of electricity drops to or below £0. This typically happens during periods of low demand and high renewable generation, led by offshore wind.
Octopus has recorded 14 days out of the past year where wholesale electricity prices dropped below £0. In these instances, wind farms are often paid by the Government to shut down to prevent grid overload, due to a lack of energy storage capacity and built-in system flexibility. This is called curtailment.
The result is higher costs for taxpayers and wasted potential for decarbonising the UK’s electricity mix. It has been estimated that wind curtailment costs topped £1.5bn in the 18-month period leading up to April 2023.
Curtailment costs could grow significantly unless more is done to build storage, flexibility and grid infrastructure by the new Labour-led UK Government – which aims to decarbonise the electricity grid by 2030.
Octopus wants to showcase how demand-side interventions could ease this transition while also saving businesses and homes money on their energy bills.
Customers will be made aware of Free Electricity Sessions a day ahead. When the Sessions begin, they will get another notification encouraging them to use energy-intensive appliances such as washing machines and tumble driers. They may also want to benefit from free electric vehicle charging or digital device use.
Flex appeal
Around 1.7 million energy customers are signed up to ‘Octoplus’ at present. The scheme also offers ‘Savings Sessions’ incentives for customers to use electricity outside of peak times during winter, as part of the National Grid ESO’s Demand Flexibility Service (DFS).
DFS was first launched in late 2022 on a trial basis. After a total of 1.6 million homes and businesses took part in the trials, with 83% stating that they would participate again, the ESO expanded and extended the Scheme for winter 2023/2024.
The UK Government last year started consultations with Ofgem on how best to encourage homes and businesses to flex their energy use around peak times beyond the DFS.
Policymakers were told that adding flexibility to the UK’s energy grid will generate savings of up to £50bn by 2050, largely through avoiding the need for new infrastructure such as pylons and backup gas-fired power plants. Some estimates are higher, at £70bn.
Ministers recognised the role of flexibility from homes and offices as well as industrial hubs.
It now falls to the new Government to shape new consumer protection rules and interventions to scale the market. Ofgem recently chose Elexon as a new flexibility market operator, promising a ‘one-stop-shop’ for the registration of flexible energy devices.
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