Octopus Energy reports customers being paid to use energy

Customers on Octopus Energy’s Agile tariff have been paid to use energy, which the company claims is a first for energy customers in the UK being paid for usage.

Through the tariff customers are presented with prices reflecting actual wholesale energy costs in a half-hour settlement period.

When demand is low, prices are lower and higher demand means higher prices, with prices capped.

Octopus also offers plunge pricing – paying customers if prices on the grid plunge below zero.

At the lowest point between 3.30-5.30am on Saturday (8 December), Agile Octopus customers were being paid 2.31p per kWh of electricity they used. This, the company says, is compared to a typical large supplier which was charging up to 17p per kWh.

Suppliers are paid to help balance the grid by removing excess energy and Octopus has become the first ever UK supplier to pass the money onto its customers.

The Agile Octopus tariff, launched in March this year, is a “world-first” time of use tariff which charges customers a different price for their electricity every half an hour.

In response to the news Octopus Energy’s chief executive, Greg Jackson, said: “It was cool to see that our Agile tariff really did respond to a negative wholesale price by automatically passing that on to consumers.

“It was equally cool to see EV driver forums light up with the opportunity for super cheap, even ‘profitable’ charging that night. One EV owner even offered to lend his charger to other drivers because his battery was full.

“The reality of dynamic pricing and engaged responsive customers has arrived.

“As we push into a renewable future embracing this dynamism will help accelerate carbon reduction, and give consumers the opportunity to benefit from it.”

Octopus said the tariff is designed to “interact with the smart products of the future, shifting usage away from peak times to reduce pressure on the network and accelerate the uptake of electric vehicles”.

In October a report commissioned by Octopus which looked into the impact of the tariff on customer behaviour was published.

The report stated that the 28 per cent of “engaged” customers who exhibited a “statistically significant change” in their usage over peak times lowered their consumption by 28.2 per cent during these periods.

On average, they reduced their peak consumption by 15.62kWh per month – the equivalent of 11 washing machine cycles – and cut their monthly carbon emissions by 4.5kg.

The effect was even stronger among drivers of electric vehicles. The 45 per cent of engaged drivers who adjusted their behaviour slashed their peak consumption by 47 per cent.

The report also found 95 per cent of consumers paid the same or less than they would on Octopus Energy’s cheapest fixed-price deal.

The supplier said the typical customer could be expected to save £45 on their annual energy bill.