21st September 2019
What makes Octopus Energy so very green?
Matt Bunney, Head of Fuel Procurement
We're proud to supply 100% renewable electricity to every single customer.
But what does that mean, exactly? When you join a green supplier, there isn't a special 'green grid' that sends renewable-only generated energy to your home. No energy supplier can make sure the actual electrons in your home are only green ones, because all power sources get mixed up when they're transported through the power networks. Instead, we make sure that for every election we supply from the grid, we invest in the generation of another 'green' electron to take its place, so that the UK's overall energy supply gets greener and greener every year.
The Renewable Energy Association even gave us their 2019 award for ‘the company that's done the most in the past year to advance UK renewables’.
Given that we're leading the charge in this area, it’s great to see that renewable tariffs are now becoming more affordable, and more large suppliers are starting to offer green electricity as standard. These changes signal a real advancement for UK energy, as we work to fight the climate crisis. But along with the companies and people that are trying to do good by the planet, there’s also some who ‘greenwash’ – sowing of seeds of confusion to make themselves seem greener than they really are.
With this in mind, we wanted to give a transparent, in-depth look at exactly how we're green – from supplying 100% green electricity now, to investing in new renewable generation, to building radical technologies to help end the UK’s reliance on fossil fuels once and for all.
We’re investing in solar energy on a massive scale.
We buy from many independent renewable generators and are actively encouraging more to market.
We’re empowering householders (and soon, businesses) to generate their own solar energy by paying them for what they export to the grid.
We’re heavily investing in cutting-edge technologies to form the building blocks of a low-carbon smart grid.
We're helping to counteract worldwide carbon emissions
Here, when we say “we”, we are referring to our parent company Octopus Group (the only shareholders in Octopus Energy are Octopus Group and our team). Octopus Group owns 100% of Octopus Renewables – the largest investor in solar energy in Europe. Octopus Renewables generate almost 4 TWh (terawatt hours) of clean, green power annually – saving 3.6 million tonnes of CO2 a year.Skip to read more about Octopus Renewables.
Our joint venture with Co-operative Energy has seen us team up with 73 small-scale generators directly, from solar energy to wind to hydropower, across the UK.Skip to read about our community energy mission.
As of April 1st this year, we are the UK’s only energy supplier to offer a smart way for people to get paid for the surplus solar energy they generate at home – what's called a smart export tariff, outgoingOctopus. As of April 1st this year, we are the UK’s only energy supplier to support people who’ve decided to install solar panels and generate green energy. They currently can’t get paid for that energy unless they’re with Octopus.Skip to read more about our market-leading smart export tariff.
We are leading the industry when it comes to encouraging the use of cheaper, greener energy during off-peak times when the sun is shining and the wind is blowing, and reducing the need for dirty, carbon intensive energy when the grid is most in demand.Skip to read more about this.
We're three years into a mission to plant hundreds of thousands of trees to counteract carbon emissions and local air pollution. Plus, we’re partnered up with Renewable World, whose green energy projects provide safe, reliable renewable power in fuel-poor communities around the globe.Skip to read more.
Octopus Renewables and large-scale investment in green energy.
Our parent company, Octopus Group, are, through their subsidiary, Octopus Renewables, Europe’s largest investor in solar energy.
Octopus Renewables generate almost 4 terawatt hours of energy each year, mostly from solar power, but also wind, and a bit of biomass.
We’re distinct from Octopus Group through the simple fact that we’re part-owned by our people. Octopus Group owns 75% of Octopus Energy. The other 25% is owned by our staff (all full-time employees are shareholders, and that’s important to us.)
What’s the difference between Octopus generating energy under Octopus Renewables, and other green (sometimes called ‘deep green’) suppliers’ own-generated energy?
It’s important to understand that currently, no matter what supplier you use, your home won’t actually run on 100% green energy. All energy types travel through the same wires via the UK’s grid, and there’s no way to send solar, wind and hydro electrons down a renewable-only highway to your home.
When you use a ‘deep green’ supplier, they buy the amount of green energy you require from a renewable generator and pump it into the grid. The electricity sent through the grid to your house actually still comes from the same pool of clean and dirty energy as everybody else’s. This means you’re investing in green energy generation, increasing the amount of renewables in that overall ‘pool’ of energy.
In our case, our sister company (Octopus Renewables) generates almost 4TWh of green energy each year and put that into the market. Practically speaking, Octopus Energy also needs to be able to supply our customers with reliable, consistent energy when the sun isn’t shining and the wind isn’t blowing, so we buy that same amount of energy from the open market alongside renewable energy ‘REGO’ certificates. On top of Octopus Renewables’ contribution, these certificates also go directly to supporting UK renewable energy generation.
Each certificate accounts for 1 megawatt of renewable energy on the grid, and amounts to around £2.30 per customer – and as we head quickly towards 1.2m customers, that’s an injection of nearly £3 million every year directly into renewable generation, over and above the cost of standard ‘mixed-bag’ electrons from the open market.
There's an extra step in the process when compared to green suppliers that directly buy from their own renewable generators – but at the end of the day, Octopus is still generating and sharing green energy with the grid (on a small and large scale), supplying renewable energy to our customers, and investing in green generators through REGOs.
Supporting small-scale renewable generators and encouraging new ones to market
We’re in the process of massively ramping up our ‘community energy’ portfolio – supporting small-scale renewable generators and encouraging new ones to market. So far, we’ve teamed up with more than 73 renewable generators around the country to provide over 110 gigawatt hours of sun, wind and hydro power to our customers.
Our recent partnership with Co-operative Energy came about in part to spur on our mission to nurture local, small-scale renewable energy generation. Moving forward, our Community Energy project makes links with more and more generators. In fact, (and we can’t go into too much detail here yet), we’re building an entirely dedicated company solely focused on supporting community energy. Four people whose sole purpose is to develop and expand the industry. This is unparalleled in energy supply.
Here's one of the small hydropower operations we've partnered with since August 1st this year – Llangattock Green Valleys
These sort of agreements (called Power Purchase Agreements) offer the kind of transparent supply chain we want to work towards. Our energy-buying money goes directly to the generators themselves, helping to grow the industry that will (soon, hopefully) power the whole UK with green energy.
Buying local is so important – we know that. It makes for a more efficient system, ultimately saving consumers money and strengthening small green businesses to boost local economies. The more support we can give to small generators, the more new ones will pop up in the market, and the UK’s energy grid will become less and less reliant on fossil fuels.
So that’s how we’re investing in renewable generation from a massive-scale down to a community scale. We also want to empower individual people to generate their own energy – saving money and carbon, and making the grid greener.
We’re currently the only energy company in the UK to deliver the government’s Smart Export Guarantee (months ahead of deadline) and offer a smart way to pay people for solar micro-generation
Renewable generation big AND small is so important to creating a green, decentralised energy grid. We want to empower customers to generate their own renewable energy through home solar PV, and we think it’s only fair for them to reap the rewards too.
Enter the world of the ‘export tariff’, an energy tariff that pays you for the renewable energy you generate at home and export to the grid. These tariffs encourage consumers to generate their own solar energy – by actually directly giving them the profits. Cheap energy for the people, and a greener grid for the UK at large.
Up until a few months ago, the government offered what’s called a ‘Feed-in tariff’ to do just this. Over 800,000 UK homes were generating their own solar power and getting paid for what they exported to the grid, but the programme ended on March 31 2019, leaving no incentive for people to install solar panels and start sharing their power with the grid.
From April 1st, we launched our own smart export solution to fill the gap left by the Feed-in tariff — outgoingOctopus. To date we have over 1000 customers signed up for the tariff, and (though through the Smart Export Guarantee the government has now mandated all large suppliers to follow our lead and offer an export tariff from January 2020) currently no other supplier in the UK can offer this.
Thanks to our custom tech, we’ve been able to launch months ahead of the rest of the industry, and customers right now on outgoingOctopus are getting paid for their surplus green energy, helping the UK bit by bit towards a cleaner grid. What’s more, outgoing goes further, offering a dynamic price for the energy that changes half-hourly based on the market value of energy at that time – meaning you get paid more for sharing green energy with the grid at times when it’s most in demand.
This kind of dynamic pricing has MASSIVE implications for how we’ll use energy in the future.
We invest heavily in cutting-edge technologies to form the building blocks of a low-carbon smart grid
Put simply: When working towards a net-zero economy, investment in renewable energy generation alone won’t cut it. Given the difficulties storing green energy, we need to ensure we can ‘smooth’ the gaps in intermittent green energy generation (when the wind isn’t blowing, and the sun isn’t shining), and make the most of the green generation we already have. This involves ‘balancing’ the electrical grid, counteracting daily ‘peaks’ in energy demand, between 4-7pm, when the grid gets overloaded and we are forced to rely on dirty fossil fuels.
Here, Octopus shines. We are leading the industry when it comes to developing a better balanced, fully automated, environmentally friendly, smart grid – the only way we can move to a Net Zero economy any time soon. Our tech-led approach has allowed us to develop tariffs and tech products that encourage a shift in consumer behaviour, spreading consumption throughout the day, and smoothing out those carbon intensive ‘peaks’. We are also pioneering innovations like Vehicle2Grid charging, which encourages Electric Vehicle owners to charge up on cheaper, greener energy overnight, drive around all day, and then discharge their batteries after work (in exchange for payment), to help balance the grid.
Dynamic energy pricing can lay the groundwork for a vastly different energy system. As Reuters put it:
One day, the weather could drive your domestic schedule. Your dishwasher springs to life at the windiest time of day. The washing machine starts spinning when the sun beats down.
We’re behind the UK’s first dynamically-priced smart electricity tariff – agileOctopus.
Catchup: How agileOctopus works
Agile forms the baseline for a wholly different way of using energy – a world where our energy usage follows renewable generation patterns. In this scenario, we use more energy when the grid is chock full of predominantly green electricity, and avoid using power during the daily energy ‘rush hour’ so no extra fossil fuels have to be called upon to meet the high demand. agileOctopus prices vary every half an hour throughout the day, depending on energy’s wholesale value. Wholesale prices are based on consumer demand (so, it’s more expensive at dinner time, but really cheap at 3am).
Sometimes, when there’s a massive amount of renewable power being generated, but not enough people to use it, the wholesale price of energy can even go negative. That's when agile's Plunge Pricing comes in – customers on the tariff actually get paid for the energy they use at this time, saving it from going to waste.
With agile, and other smart tariffs like it, we’re experimenting to see if consumer habits can be changed when there are financial incentives to make the most of perfectly good green energy, when it might otherwise go to waste.
There’s really nothing else like agile in the market today. The tariff was even named Digital Project of the Year at this years’ BusinessGreen Leaders Awards –
The judges were won over by Octopus' pioneering use of real time energy data and smart meters to deliver its Agile service, providing the world's first renewables powered time-of-use energy tariff and helping customers to curb energy use, cut bills, and maximise emissions savings.
A collective shift to using energy in off-peak hours would mean a cleaner, greener energy system. Obviously no one wants to get up at 3am to turn the dryer on when electricity is super cheap. So we’re also working on innovative automations and integrations so customers get the benefits of dynamic pricing without having to lift a finger, pairing up with everything from Amazon’s Alexa to IFTTT.
Whether it’s smart plugs , or smart chargers, or smart home apps – your appliances can be triggered to turn on based on how much green energy is on the grid, and how cheap it is for you, while you sleep.
We’re encouraging customers and other smart home/IoT innovators to automate with Agile via our public API, meaning the daily pricing data is freely available for anyone to play around with and hook up to neat new product integrations. We even have a full time ‘Future Technologies Evangelist’, Phil Steele, who works day and night on ways to build an energy efficient, Net Zero smart home. Check out what Phil’s been up to on our blog.
We plant hundreds of thousands of trees, and fund Renewable World’s green energy projects in fuel-poor communities around the globe.
There are some emissions we’re not able to avoid completely, whether it’s from non-green transportation or our customers’ gas usage for things like heating and cooking. For now, for a few ££ extra on your bill per month, we’ll offset any carbon emissions from the gas used in your home. We do this in a few ways, which you can read about in depth here.
We’re funding projects to bring cheap, green energy to fuel-poor communities around the world with the help of our partner Renewable World.
Renewable World bring low-carbon technologies to areas with limited access to safe, reliable energy. It might mean installing solar lighting in a Kenyan fishing community that previously relied on dangerous, highly polluting kerosene lamps to do business. Or replacing a small town’s unreliable diesel generators with a solar micro-grid, empowering the community with access to energy that doesn’t cost the earth.
The solutions Renewable World provides aren’t a one-size-fits-all. They are customised to have the most impact in the particular community, and they’re set up with the community’s help. As well as massively reducing carbon footprints by providing an alternative to fossil fuel power, RW’s projects empower local people to truly make the most of the new tech, enabling the creation of new businesses to boost the local economy.
We plant trees across the UK
In 2017, we launched a UK-wide community tree planting programme, working with schools and community spaces nominated by our customers to raise awareness for air pollution, increase biodiversity, and soak up carbon dioxide.
The first year, we planted 1,000 trees. In 2018, we planted 10,000. This year, we’re going bigger still – far bigger – in an effort to offset some of the carbon emissions we’re generating as a business as well as our customers’ emissions. Watch this space.
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