Sounds too good to be true, doesn’t it? But no – welcome to the brave new world of dynamic demand management on the National Grid.
Those of us who get our electricity from Octopus and have compatible smart meters should last year have received an invitation to opt in to the Free Electricity offer. What exactly is this and why are they being so generous?
The way our electricity is generated and supplied is changing as part of the effort to cut carbon emissions associated with powering our buildings and vehicles. A large part of this comes from the expansion of renewable energy generation, in particular offshore wind, although with the change in government last year there should be an acceleration in solar and onshore wind generation in the coming years.
One of the challenges with renewable energy generation is that wind and solar power is at the whim of the weather and (in the case of solar) the rising and setting of the sun. Unlike gas-fired power stations, wind and solar cannot be conjured up on demand. On the other side of the coin, there are increasingly times when there is too much renewable energy generation and not enough local demand or grid capacity to transport the energy long distances to where it is most needed. In this scenario wind generators are ordered to stop their turbines generating, and in return they are provided financial compensation equal to the value of the claimed lost generation. Gas-fired power stations closer to areas of high demand are also then paid to fire up and make up the shortfall. In 2023 it was reported that the costs associated with curtailment payments was around £750 million – a cost that is passed on to consumers to the tune of around £40 per household per year, and one that could increase four-fold over the coming years as wind energy capacity expands around the country.
A partial solution to expensive curtailment is to induce extra demand at the time when curtailment would otherwise be necessary, and this is the rationale behind Octopus’s scheme. Customers are given a time slot the following day – this has been an hour in the middle of the day when wind generation is high, demand local to the wind farm is low and competing local solar generation is at its peak. Octopus then works out how much electricity we would normally have used around this time and for the duration of the slot allows us any additional energy we use free of charge in the form of credits back to your account. Encouraging demand for what would otherwise be surplus renewable energy generation is clearly more cost-effective than paying generators huge sums to balance things out across the grid.
How best to take advantage of this opportunity?
- Turn on your washing machine – do a 90degC maintenance cycle if you have nothing to wash
- Run a dishwasher or tumble dryer cycle
- Heat up your hot water cylinder using the immersion element rather than the boiler (don’t forget to turn it off again at the end of the slot!)
- Charge your EV and/or home battery
- Do the hoovering
- Cut the grass with your electric mower, or do some hedge trimming or shredding
- Do some baking
- Cook lunch or some meals to freeze for later
Any other ideas for making use of this power? Let me know in the comments…