A small energy supplier is offering to pay customers to use energy when demand is low and electricity is at its cheapest.
Octopus Energy’s new Agile tariff tracks wholesale electricity prices, which fall when more electricity is generated than consumed – sometimes below zero, when suppliers are paid to take energy off the grid.
Octopus promises to pass these “negative prices” on to consumers, effectively paying them to use energy during times of over-supply, it said. Customers will be alerted to this “plunge pricing” via text message, email or on the app.
Customers could take advantage of the falling prices by setting a timer on their washing machine to run at the cheapest times, or charge an electric vehicle at low-demand times overnight, saving drivers up to £669 per year, the supplier claimed.
While historically big drops in energy prices have occurred overnight as energy consumption drops, with ever increasing amounts of renewable energy available from solar and wind generation, such events are becoming more frequent throughout the day.
When demand exceeds supply and the wholesale price rises, users will be charged the higher price – but this is capped at 35p per kilowatt-hour. The firm said most customers will benefit as the wholesale cost is below the standard price 80pc of the time.
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