Major energy firm to launch ‘free electricity’ sessions for customers when wholesale prices plummet

A MAJOR energy firm is launching "free electricity sessions" when wholesale prices fall below zero.

Starting from today, Octopus Energy customers who are signed up to the "Octoplus" rewards scheme can take part.

The sessions will last an hour, and customers will have be able to use electricity for free and receive credits for using more than they typically would.

For example, if Octopus Energy were to run 14 of these sessions over 12 months and customers were to take up all of these sessions and increase electricity usage during the periods, it could add up to a saving of £17 for an average user.

Britain experienced a record-breaking 214 hours of negative wholesale power prices during 2023, averaging more than half an hour a day, according to Drax Electric Insights.

It happens on extremely windy days or when the supply exceeds the energy demand required to power households and businesses.

At the moment, when wholesale prices plummet wind farms are paid not to generate surplus power to help prevent overloading the electricity grid.

These so-called curtailment payments exceeded £300 million in 2023.

Energy firms, including Octopus Energy, have been concerned by this waste of valuable green energy.

To help with the issue, the energy supplier will become the first to 'pay' its customers to use more energy during times of surplus power.

Energy firms are looking for new ways to encourage customers to use less energy.

This follows plans from the regulator to introduce a new energy price cap that would vary based on the time of day.

Last year, a number of energy firms launched schemes where customers could be paid to reduce energy usage at peak times during winter.

It was in response to National Grid's drive to prevent blackouts due to peaks in usage during colder weather.

Octopus Energy was one of the firms that launched a scheme, giving customers two-hour long windows.

However, the savings were quite small - the top 5% only earned £4.80 per session.

Octopus plans to offer more opportunities to earn Octopoints during peak times later this year.

HOW IT WORKS

All customers with a smart meter, including smart prepay meters, will receive an alert the day before each session.

When the session begins, they can ramp up their electricity usage—whether it’s charging gadgets, running a laundry marathon, or any other household activity.

Any extra electricity consumed beyond their normal usage will be credited back to their account.

For example, a typical household uses between eight to 10kWh of electricity per day, according to Ofgem.

Those on Octopus Energy's standard variable tariff pay roughly 24p per kWh of electricity used.

So if you were to use 1kWh more electricity during a free electricity session, your energy account would be credited with 24p.

If you use 2kWh more, you'll get 48p, 3kWh more, and you'll get 72p, and so on.

If you were to use 5kWh of electricity by doing all your laundry, dishwashing, kettle-boiling, cooking and hoovering within the hour session, you'd be credited with £1.20.

So if the energy firm were to run 14 of these sessions over the next 12 months and you used 5kWh over extra energy during each session, you'd bring home £16.80 in free energy credits.

Of course the exact amount you'll earn from taking part in the scheme will depend on the unit rate charged on your tariff and how much extra energy you use during each session.

There's also no guarantee that the energy firm will run 14 sessions - it could run more or could run less.

Rebecca Dibb-Simkin, chief product officer at Octopus Energy, said: "Free electricity sounds like it’s too good to be true… but it's real!

"By using more when there is plenty of renewable energy instead of when the grid is dirty, our customers can save money while making the grid greener and more efficient.

"It's a win-win for our customers and the planet."