Almost a third of consumers shift their electricity consumption out of peak times if given the right tools to engage in their usage patterns, according to a study of customers on an energy time of use tariff.
Agile Octopus, launched in February 2018, uses smart meters to calculate and bill customers’ electricity use in half hourly periods. Supplier and energy tech firm Octopus Energy says this reflects prices of the electricity that it buys a day ahead, which customers can check at 4:30pm every day.
This allows them to see when the cheapest windows of energy use will be the next day, giving them greater control over their consumption and a better idea of their daily spend.
The company says that “as a simple rule of thumb”, Agile customers need to adjust their consumption out of the afternoon peak between 4-7pm to benefit from the tariff.
Over a six month period, Octopus Energy found that 28% of 149 customers using its Agile tariff showed a statistically significant change in peak time usage, dropping from 16% to 11.5% of their daily consumption.
This behaviour change reduced peak demand by an average of 15.62kWh per month while saving 4.5Kg of carbon dioxide.
These results are more favourable than a six month time of use tariff study conducted in 2016 which found that participants shifted just 10% of their demand to periods with reduced tariffs.
By making such changes in activity, Octopus Energy’s study also found that considerable savings could be made on annual consumer bills, particularly for those who engaged the most. Octopus found that the most engaged 25% of customers in the study saved £91 compared with the company’s 12 month fixed tariff, and £229 compared with the average large legacy supplier standard tariff.
As the table above shows, drivers of electric vehicles were found to have the most to save from a time of use tariff that incentivises them to shift the periods in which they charge. The most active Agile EV customers were therefore found to have dropped the proportion of power they used in the peak period by 47%.
Greg Jackson, chief executive of Octopus Energy, said: “Agile has shown that by helping people make decisions that feel natural to them, energy consumers do change their behaviour.
“Grasping the opportunities of disruptive business models and breakthrough technology will enable energy consumers to reap the rewards of progress they have benefited from in so many other consumer markets.”
Octopus Energy will now seek to expand the group to include more numbers from across various demographics to gain more information before introducing more technologies such as artificial intelligence to help those customers “not making the most” of the tariff.
The company also plans to build products that can automatically interface with smart time of use tariffs to optimise home energy use.
“Now we’ve demonstrated that the technology works, we welcome the opportunity for more consumer and market-led approaches to get the most out of our grid, rather than traditional command-and control mechanisms,” Jackson added.