‘Power Rinse’: Households game Demand Flexibility Service

Domestic consumers have been gaming National Grid’s Demand Flexibility Service by deliberately increasing their electricity usage in the hours leading up to events, Utility Week has discovered.

Our investigation of claims made on internet forums found multiple examples of customers artificially inflating their consumption to earn money. One Reddit poster claimed to be able to generate a profit of £175 per session, spending £45 on electricity but receiving £220 of flexibility payments.

The Demand Flexibility Service was introduced last year as one of a series of contingency measures to help National Grid Electricity System Operator (ESO) manage demand peaks over winter in the midst of the global gas crisis brought on by Russia’s invasion of Ukraine.

These peaks generally come during weekday evenings. According to the guidance document for the service, the baseline for a weekday event is determined by first calculating consumers’ average usage during the same period on the previous 10 weekdays, excluding days on which there was another event. An in-day adjustment is then applied to this volume based on consumption during the three hours prior to the beginning of an event.

Participating consumers found they could massively increase the payments they received from just a few pounds to tens, and in one case hundreds, per session by raising their consumption during this in-day adjustment period.

In a thread on the Octopus Energy subreddit explaining how to make money from the supplier’s Saving Sessions, one user claimed this method had enabled them to earn a profit of £175 per session: “To make some real money, what you need to do is use as much energy as possible during the in day adjustment period, so if the session is 5-6pm, during 1-4pm you use whatever you can. It weighs on the formula heavily.

“I am now managing nearly 175,000 points per session, £220. This far outweighs my electric cost of around £45 per session.”

The user said they were paying a unit rate for electricity of 41p/kWh.

When another Reddit poster questioned how they were able to rack up a bill of £45 – equating to almost 110kWh of electricity – the user said this was “easy” as they had a triple phase power supply, two electric vehicles, a battery storage system, an air-source heat pump, an immersion heater and underfloor heating.

One prominent user on Octopus Energy’s own forum coined the term “Power Rinse” to describe the method, with the terminology becoming common parlance among posters. They said they had been able to use 30kWh of electricity during the in-day adjustment (IDA) period, stating:

“Easily done:
EV:7.4kW
Immersion heater: 2.8kW
A2A ASHP: 1-2kW
DC Coupled Battery: 3.2kW
Oven Clean: 2kW
Soon adds up to allow a Power Rinse TM”

Although these appear to be exceptional cases, numerous users on the Octopus Energy website said they had been able to boost their earnings from just a few pounds, if any, to well into the double digits. Many more posted screenshots from the Octopus’ phone app showing the number of OctoPoints they had earned over recent sessions.

One such user, following the advice of others, posted a screenshot showing how they had earnt zero point during the sessions on 1 and 12 December but almost 28,000 points on 19 January and then more than 51,000 on 23 January, adding: “It works! 19^th I tested the theory, 23^rd I went for it!”

Octopus Energy said 800 OctoPoints are worth £1 to consumers. On this basis, the latter figure of 51,000 points equates to almost £64.

“I just shifted my automations for the go period to these three hours,” said another user. “I’m not convinced this is really for the best in carbon emission terms but financially it is a win for both me and Octopus.”

“Ooooo, got my result from the 23^rd,” they added in another post. “I didn’t try too hard on this day and still made a profit of £15. Power rinse works.”

The threads on Reddit and the Octopus Energy website included links to a spreadsheet someone had created to enable people to work out exactly how much money they could earn. The discussion on the Octopus Energy website eventually turned to whether the baselining methodology would be altered, and if so, whether they could continue gaming the system.

“I would not be surprised if the IDA rules don’t change once this little earner (loophole) becomes more well known,” said one user. “But we have already had a good run.”

Another said: “Dumping the IDA does seem like it would be a good thing… much harder to game days that have already passed!”

One user suggested that if the in-day adjustment was removed then “plan B” would be “use as much as possible during the likely peak periods on all the non DFS days. Without ramping your bills too much of course.”

“The thing is that you don’t know when the next saving session will be,” replied another. “If that’s the only way to have the system, I shan’t be participating in that (not judging anyone else).”

“Well, it is very much plan B,” they responded, “but if you have to use kWh during peak cost periods, you might as well as aim for… 16.30 to 19:00 giving you faint chance of improved savings if there is a DFS even within 10 days. Another example of perverse incentive.”

“If the in-day adjustment goes away, I think plan B might not be viable,” said yet another user. “10 days of plan B at peak or even variable rates might outweigh the returns. I think this then becomes a game only for those on tariffs with predictable cheap times during the likely event time window.”

They said this method would likely only work if the flexibility payments during the sessions were at the high end of the range seen over this winter and “you play a perfect game on the day itself and using nothing over the window.” They noted that if there were more than 10 days between sessions, each additional day would cost more money, quickly offsetting any potential gains.

National Grid ESO told Utility Week it was aware of reports of gaming and that it had alerted suppliers which were also aware of the issue. The ESO emphasised that the Demand Flexibility Service was introduced as innovative contingency measure for the winter and is not a commercial service. It said the service ends this week and it is already conducting a thorough and holistic review to see how it can be approved.

Although a number of other suppliers took part in the service, Octopus provided the greatest volume of flexibility by a significant margin.

A spokesperson for Octopus said: “We’ve always found that our early adopters are also early to understand how they can test our processes. So yes, we are aware, but actually it just means we’ve been able to adapt and improve – it’s good to be tested.

“This also proves why it’s so important to do in-market testing rather than the traditional energy industry approach of only virtually modelling. Real world activity enables us to find people who will probe things for both good and bad (and is why Octopus have always tested and iterated in the real world).”

They said the “handful” of people that reported earning large payments through gaming the service represent a miniscule fraction of the nearly 700,000 customers who took part in their Saving Sessions.

Nevertheless, Dylan Johnson from Future Energy Associates said their retail analytics platform did pick up “unusual consumption behaviour” from “certain energy suppliers” in the lead up to events, with overall usage in the adjustment periods exceeding what would otherwise be expected at these times by a small but noticeable amount.

Johnson said this effect was not large enough to be of significant concern at the moment but would be a problem if larger numbers of people participated in and gamed such services. He also noted that the consumers able to gain the most from gaming are likely more affluent ones who are able to afford multiple technologies such as electric vehicles, batteries and heat pumps.