Octopus Energy CEO Suggests Households Could Accept Occasional Blackouts for Lower Bills

The boss of the UK's biggest energy supplier has suggested that some households would accept an occasional electricity blackout in exchange for much lower energy bills. A year on from Europe's largest power outage – which left tens of millions of people in Spain and Portugal without trains, metros, traffic lights, ATMs, phone connections and internet access – the chief executive of Octopus Energy argued against costly investments in the UK's power grid that are adding to household bills.

Greg Jackson told an industry conference that many households in Spain, where Octopus Energy has a growing business, would say they were happy to accept "the odd blackout" in return for electricity costs that are 25% lower. "To be really clear, I'm not advocating for blackouts, but if you asked Spanish consumers 'would you accept the odd blackout in return for electricity costs that are 25% lower, or don't have spikes, or a more reliable economy?' enough of them would say yes," he said.

People would be "far less bothered" about a blackout now than they might have been in the past, Jackson added, because they could continue watching things on their laptop during a power outage. "They've got a battery in there that gives them a couple of hours," Jackson said. He added that home batteries, which are sold by Octopus Energy, are "so cheap now" that even people who need reliable electricity to run medical equipment would be able to tolerate a blackout.

Jackson, 54, made the comments, which were first reported in Utility Week, on the anniversary of the Iberian blackout in response to an audience question about the challenges of running a renewables-heavy energy system such as the one in Spain. The widespread power outage claimed the lives of at least six people across Spain and Portugal, including two people with medical difficulties who died after they were unable to run breathing equipment.

Jackson told conference delegates that the greater challenge in running a clean power system was in controlling the cost of network investments. Octopus Energy has been outspoken in warning against grid investments that might prove to be unnecessarily expensive as new technologies emerge.

A spokesperson for Octopus Energy said: "Countries that have embraced cheap renewables and built in flexibility – like Spain – are seeing dramatically lower energy prices and far less exposure to spikes. Meanwhile, the UK risks doing the opposite: hardwiring in high costs with tens of billions of grid and network spending, without enough transparency on whether all of it is really needed."

Gas and electricity bills are expected to climb to an average of almost £2,000 a year for the average dual fuel bill from July, while households struggle to pay off record high debts totalling more than £4.5bn. The surge in household energy bills is due to the sharp increase in the market price of gas as a result of the ongoing conflict in the Middle East, which has also increased electricity costs due to the ongoing reliance on gas plants.

But the cost of upgrading power lines and networks is also driving bills higher. The cost of grid upgrades, which are paid through energy bills, has climbed from about £254 a year under the price cap set for the summer of 2021 to £457 under the current cap. "Build flexibility, and bills go down," the Octopus spokesperson said. "Ignore it, and we risk overbuilding for decades."

Renewable energy critics initially blamed Spain's reliance on wind and solar power for the outage, but the official report said "multiple interacting factors", involving conventional power plants, renewables and the power network played a role in Europe's largest power outage.

Speaking at the same event, Fintan Slye, the chief executive of the National Energy System Operator, which is responsible for keeping Great Britain's lights on, said there is expected to be a "step change" in the way households use electricity that "doesn't go as far as blackouts". Slye said significant investments in the power grid were still needed to enable electricity to be transmitted from where it is generated to where people are located.