Standard content for Members only
To continue reading this article, please login to your Utility Week account, Start 14 day trial or Become a member.
If your organisation already has a corporate membership and you haven’t activated it simply follow the register link below. Check here.
Other power suppliers were forced to pay at least £49 million after Octopus Energy overestimated the amount of electricity its customers generated and exported to the grid.
Elexon has revealed that from June 2022 until October 2023 the retailer decided to estimate microgeneration volumes for approximately 40,000 of its customers, even though actual data was available.
Octopus then reported amounts of exported electricity that were significantly higher than what its customers could have generated.
This, Elexon explained, resulted in higher invoices for other Non-Half Hourly (NHH) suppliers due to an increase in Grid Supply Point (GSP) Group Correction Factors (GCFs).
As such affected suppliers will recoup at least £49 million through the settlement process, with the final figure certain to be higher.
Elexon added: “Octopus has now provided more accurate estimates for most of the meters concerned, removing at least £49 million of incorrect estimation. Invoices for NHH suppliers that lost out because of the initial error have been corrected through the settlement process.
“Additional corrections may take place as more actual meter reading data from Octopus’ customers becomes available. Any further reductions in Octopus’s microgeneration volumes will result in more money being redistributed to other suppliers.”
Commenting on the matter, an Octopus spokesperson said: “Octopus has seen astonishing growth in export over the last year – from 30,000 customers to over 100,000 – more than 50% of the market.
“Whilst it was a small number, Elexon’s process for estimating meter readings was fine – but as we scaled we wanted to move to more accurate half hourly actual readings.
“We tried enrolling on half hourly to do away with estimates altogether – it didn’t work with the existing industry systems and we saw a temporary error (which has now been fixed).
“We’re working with Elexon to improve the process moving forward and as ever – Octopus has led the way on innovation and it’s great to have this sorted.”
A spokesperson for Elexon said: “Maintaining the accuracy of settlement for all BSC Parties and consumers is of utmost importance to us. Octopus Energy has accepted full accountability for the error and it is taking action to correct it. We are monitoring the progress closely.
“Since February 2023, Elexon and the BSC Panel have had the authority to disclose details of significant settlement errors that are caused by BSC Parties companies. This is important for providing more transparency and accountability for settlement, which plays a key role in the smooth running of wholesale market arrangements.”
It comes as Octopus recently revealed that shareholders invested $800 million (£625 million) in its latest funding round.
The new investment values the supplier at $7.8 billion (£6.2 billion), a 60% increase since its previous investment round in December 2021.
Please login or Register to leave a comment.