Octopus Energy has called on the National Grid ESO to stop burning coal and instead use consumer energy consumption flexibility to reduce demands on the energy grid.
The company implemented its ‘Saving Sessions’ – enabled by the National Grid ESO’s Demand Flexibility Service (DFS) in October 2022. The scheme offered financial incentives for consumers to reduce electricity demand over peak periods. In April, Octopus said that their customers had displaced almost 2GW of electricity demand.
Octopus said its ‘Saving Sessions’ proved that paying users to shift usage (“consumer flexibility”) can remove the need to use coal fired power plants.
“Paying coal plants adds £400 million to bills – whilst paying customers could push bills down by a hundred million,” the company said.
Octopus is publishing a new White Paper showing that demand flexibility is a “dramatically cheaper and cleaner alternative”. Last winter, National Grid ESO paid up to £395 million to keep coal power plants on standby, Octopus continued.
Consumer flexibility could provide the same benefits to the grid as keeping coal on standby for a quarter of the cost – around £100 million, according to Octopus.
The company’s white paper looked at the results of their demand flexibility scheme in which over 700,000 customers with smart meters shifted around 1.9GWh of electricity at peak times. “The top 5% of ‘Saving Sessions’ participants earned over £40 over winter and 96% of customers surveyed said they are interested in participating in the scheme again,” Octopus said. Many of these customers donated their earnings to Octopus’ financial hardship fund to help customers struggling with their bills.
The Energy and Climate Intelligence Unit also echoed Octopus by saying that developing renewable sources and the flexibility of the smart grid would help eliminate the use of coal.
National Grid has asked the Ratcliffe-on-Soar coal-fired power station to warm up to cope w/ extra electricity demand for air conditioning
— ECIU (@ECIU_UK) June 12, 2023
Coal use is 📉 across Europe, and its role can be eliminated completely with #renewables + smart grids + storagehttps://t.co/72XCEmCEzt pic.twitter.com/3pwzgpXszd
In March, EDF closed their West Burton A coal fired power plant despite calls for a contingency contract extension to further bolster the UK’s energy security.
Alex Schoch, head of flexibility at Octopus Energy, said: “We’ve shown the potential of consumer flexibility – it’s now time to roll this out across the UK and end our reliance on expensive and dirty coal power plants once and for all. Over the winter we saw how our future green grid would work. We’ve proven that households can balance the grid and be part of the movement away from fossil fuels.”
“We’re still in a cost of living crisis and It’s crazy to pay coal power plants when we could pay hard-pressed customers instead,” Schoch added.
Octopus has been calling for the end to the use of coal as a backup energy source since March, and the company has also been talking up the potential of vehicle-to-grid (V2G) energy sharing. Using EVs as de facto batteries would help provide balancing services by supplying energy to the grid during peak times when the driver doesn’t require the use of their EV.