Octopus Energy has been forced to explain why its customer's bills are rising, despite its power being "100% renewable ". Experts have predicted that Ofgem's price cap could peak at £5,550 come April and as a result, all energy providers - including Octopus - have raised prices.
The rising cost of wholesale gas has caused the country's current energy crisis. Some Octopus customers took to Twitter to ask why their bills were going up, as the power they get is labelled 100% 'green'.
Corey (@soper_mr) asked: "Octopus is putting our prices up, but claim to be 100% renewable. Did the price of wind go up lads?"
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In response, the supplier said it was a fair question that they get asked a lot. The founder of the firm, Greg Jackson, recorded a video to explain the situation.
In the two-minute clip, Jackson says: "In the current outdated system, the most expensive type of energy (usually gas) sets the price for ALL types of energy, including renewables. It's bonkers."
Jackson explained in the video that the UK has an "outdated way of running its electricity market" and that this had pushed up the cost of renewable electricity. He added that companies like Octopus pay a single price, which is set by the National Grid, to procure energy, regardless of where it comes from.
The Octopus website simplifies this as similar to buying a house. The price is set by what neighbouring homes are sold for, not the actual cost of building the house.
Therefore all energy sources in the UK, from wind to solar to fossil fuels, are sold based on the high price of gas. The higher price of 'brown' electrons is putting up the price of 'green' ones, too.
Jackson added that Octopus also faces extra costs to offset the non-renewable energy used by its customers, and pay for green power to be created in its place.
The company's website explains that despite being an Octopus customer, the energy supplied to your home will not be 100% green. It says: "When you join a renewable supplier, there isn't a special 'green grid' that sends renewable-only generated energy to your home.
"We ensure that we are 100% green by making sure that for every electron we supply from the grid, we invest in the generation of another 'green' electron to take its place."
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