Octopus Energy pays customers more than £1 million to save electricity

Octopus Energy has paid out more than £1 million to customers who took part in an innovative new pay-not-to-play scheme.

Households and businesses which reduce their electricity consumption when asked will be paid for every unit they do not use under the scheme, which is being trialled by National Grid.

Octopus customers have been the most active among the suppliers offering the service.

The firm said the top households in the scheme have saved as much as £20 since it launched a little over a month ago.

“This is a massive milestone. Across just four hours, we’ve been able to pay out £1 million to our customers,” said Alex Schoch, head of flexibility at Octopus.

“Normally, this money would have gone to businesses or dirty gas power plants to balance energy demand. Instead, it’s helping people lower their energy bills this winter.

“We are proud to have pioneered this trailblazing scheme, which is paving the way towards a smarter, greener and cheaper grid for all.

“And we’re glad that other energy suppliers are now getting involved, allowing even more people to grab a bargain and lower bills for everyone.”

Octopus said more than 250,000 households have taken part, making an average of £4 each.

So far, National Grid’s Electricity System Operator wing has run four one-hour trials of the so-called demand flexibility service.

However, the news from Octopus came hours before the grid was set to run the first two-hour session, when customers are expected to reduce their demand more than before.

An electricity grid constantly needs to make sure there is as much electricity going into the grid – supply – as there is going out of it to be used by households and organisations – demand.

Normally, when demand is set to be high, the grid will simply increase supply to keep up with it. However this can be very expensive as the grid will have to pay whatever it takes to get enough electricity.

By asking people to reduce their energy use during certain times, the grid can manage demand instead. There is nothing stopping the customers from then using their washing machines or dishwashers after the period is over.

Customers are also not forced to sit in darkness with their appliances turned off during those hours – they decide what to do and will not be punished for not taking part.

Customers can also be tactical about what electricity use they cut back on. Turning off an energy-efficient light bulb for an hour is only likely to pay around 1p during the period.

Not using an oven or other heat-producing electrical appliance like a tumble drier is much more effective.