Modo Selects - Demand Flexibility Service with Kieron Stopforth (Origination Manager @ Octopus Energy)

And in terms of how often this might happen, so is there a rule that says how many times this can happen over the course winter, or could it be happening every day? You know, if you have a scenario where France and Germany and mainland Europe is using a lot of power, and the interconnectors aren't importing to the UK. And at the same time, you have a wind lull. That's the perfect storm of extreme grid stress.

So if that happened fairly frequently, then we could get a lot more events. This is something that, you know, if you have a kettle or electric cooking electric heating or electric hot water at home. Anybody with a smart meter can participate, and that opens it up right now to a much bigger addressable market of customers. Hello, everybody.

Welcome back to another installment of the Moto Select series. You may have heard that the demand flexibility service is back this winter. But what's it all about? After its launch in twenty twenty two, Ed spoke to Kieran Stock Fourth, origination Manager at Octopus Energy, to find out all about the service.

As always, if you are enjoying the podcast, please give it a like and subscribe, it really means the world to us. And if you want to see more content from the Moto team, head over to our platform or to LinkedIn. And with that, let's jump in.

Hello, and welcome to another episode of the Moto Podcast.

Today, I'm joined by Kieran from Octopus, who is going to talk to us all about DFS. Kieran, over to you.

Hi. I'm Kieran Stockforth, origination manager at Octopus, and it's a pleasure to be here. Great to have you on. Right.

So I promised you some quick fire questions to get started. So I'm gonna do four of these and then we're gonna get into all things DFS just to get the seat warm. So who is going to win the World Cup? England.

Of course. Great answer. Great answer. Although my wife, my wife is from Brazil. So I have quite a good backup option if England doesn't go to plan.

That's an accept hedge. Yeah. Well, well done. Good choice. So Elon Musk superhero or villain.

Different de in different spheres. I'd say. Okay. Okay. Alright. To the UK network, would you add ten gigawatts of interconnection or would you add ten gigawatts of storage?

I would add ten gigawatts of storage. I'm not sure if that's the right answer for stability, but it would probably make my life more interesting. Okay. I love it.

And would you like Evies to go ten percent further or would you like them to be ten percent cheaper? I think ten percent cheaper. Ten percent cheaper. I think that's the right answer as well.

Okay. Great. And let's get into it. So DFS.

What is DFS?

So DFS is it's short for the demand flexibility service. It's a new balancing service created by national grid to help manage stress on the system this winter. Okay. And the way they're going to do this is If you're a home or a small business, they'll ask you to turn down a day in advance.

And by adjusting your energy consumption for the first time ever, you can get paid at sort of similar level of balancing, you know, if you're a home energy consumer. So it's the first time anywhere, really, that a whole country's smart meter population can participate in grid balancing and get paid for it. Okay. So so how does that work?

Right? So so you said that the day before you would get told. So how does that happen? Yeah.

So National Grid will prepare a series of forecasts. Closer and closer to delivery.

At day before, if they think that the system's going to be short on the following day, then they'll send out an alert and say, we think we need, you know, x hundred megawatts from the demand flexibility service providers then bid into the service. Grid will dispatch according to which ones are cheapest, and then those providers will they'll then instruct those providers and say, you know, tomorrow from five till six PM, you have to deliver this amount of capacity that you bid in. Okay. So That's really interesting.

That's a so just from a consumer perspective, then before we dive into that whole process of how that works. So so what if as an alignment home, and this process is happening behind the scenes. How do I what happens? Do I get a notification on my phone?

Do we get a letter coming through? Is it done by fax? Don't tell me it's done by fax. Yeah.

I think we've probably retired fax machines in the octopus offices, but other providers may differ. Yeah. But, basically, so you know, all providers in the UK can sign up. So, you know, I think EON, I think Centrica is in the process of signing up.

But, you know, there Okay. All of the sort of usual suspects are kind of looking at this service. Yeah. So if you're a customer of one of those, they each have their different ways that they do it.

If you're with octopus, you know, we sent out an email to one point four million smart meter customers. So he said, like, anybody with a working smart meter please participate. We got about four hundred thousand customers signing up to it. And so what those customers will see is When we know that we're definitely going to get dispatched, we'll send everybody an email.

If they have the Octopus app, then we'll send them an app notification. I would say, you know, There's an event tomorrow from six to seven PM. This is how much you're going to get paid. Would you like to participate?

So they then opt into the event and then shortly before the actual time of the event, you know, we'll send them a reminder and they can, you know, hopefully they'll go around and kind of switch off high energy consuming devices in their home. Yeah. And then afterwards, we take a look and see how everybody did. That is a great system.

So so there's an email. You then say yes or no, you want to be part of it. And then they get a second message that says, yep, this is definitely happening. Do would you within that?

Would you say kind of how much a house might save? Would they would octopus kind of say, well, you might save a pound, ten pounds, hundred pounds, How much are we thinking kind of an average home might save? Yes. Exactly.

So so basically we so we think kind of an average house you know, it depends how many times the service is called, and it depends how many times, you know, it depends how much customers turn down. Okay. You know, we're expecting anywhere in the kind of thirty to a hundred pound ballpark. But I guess to compare to the we had an event last week already, and the average customer got paid a pound for turning down in the window.

But if you look at kind of the top five percent, they got on average four pounds or above. So, you know, for people who are really able drive energy reductions.

This is going to be kind of quite a welcome benefit to them this winter. Okay. So so plenty of numbers in there. So you were saying maybe sort of up towards a hundred pounds for sort of perhaps the people who are most able to turn down over the course of winter.

That in a single event, maybe something like, you know, fifty p to say three, four pounds. Is that is it are those sort of fair numbers? Or I think that's more more or less of the range, but the -- Okay. -- but the average customer got just over a pound.

Just over a pound. And in terms of how often this might happen, so so is there a rule that says how many times this can happen over the course of winter, or could it be happening every day? Yeah. So there there are twelve guaranteed events.

So National Grid are running these kind of test events where there's a fixed price and, you know, generally, anybody who bids in at that price will get dispatched. So that's about three thousand pounds per megawatt hour or three pounds per kilowatt hour. Okay. Now during, as to the rest of them, it depends how bad the system gets over winter.

So you know, if you have a scenario where France and Germany and mainland Europe is using a lot of power and the interconnectors aren't importing to the UK, And at the same time, you have a wind lull, then there could that's the perfect storm of extreme grid stress. So if that happened fairly frequently, then we could get a lot more events. I think currently we're expecting so so twelve is the guaranteed minimum. We're expecting somewhere in the ballpark of twenty to thirty based on what we can see for the winter.

Okay. So so twenty to thirty at an average of a pound, a go gets you to sort of, yeah, that's that's what I can do. It gets you to sort of thirty pounds, but you might see people sort getting over a hundred pounds. Okay.

I yeah. And I think partly it's sort of the test events have a guaranteed pricing level, which is, you know, three pounds per kilowatt hour.

During those extreme stress events, we've heard that the prices could go as high as six pounds Yes. You know, I mean, if you remember in summer, the balancing price went to something like nine and a half thousand pounds. So Hopefully, this will be a cheaper form of balancing to the grid. But if we start to get more of those events that are up towards six pounds, it's gonna shift that average higher. And start pushing, you know, what customers can make closer to that sort of hundred pound average number.

Okay. Great. And in terms of how people would get that turned down. So I was on Twitter when your trial was going on and I was seeing people sort of turning off lights and perhaps you know, making the kids do more homework and not have their dinner until sort of eight o'clock. What are the kind of things you're expecting to see? And would you be expecting people to use their electric vehicles in this?

Yeah. So I think well, well, firstly, Twitter is great. And I think one of the really great things about the program is that You know, this is coming at a time when customers' homes and their bills are under so much pressure. And, you know, we've definitely as a company been thinking a lot about how we can kind of support and help our customers through, you know, for many people, this will be an extremely difficult period, which is why we've kind of invested and really helped to sort of push forward the DFS concept.

And it's why we're going so big on it because, you know, any way that we can help customers out this winter, we want to be doing So at the same time, you know, we have a lot of, like, really engaged customers who, you know, the combination of what we're able to do through our kind of customer communications and getting the right messages across and kind of connecting with customers. Like, a lot of people, you know, From what we saw on Twitter, a lot of people enjoyed participating.

And it was a chance to, for customers to think about energy and climate. It's also a chance to you know, we had we had almost three hundred thousand people participate in the first event. So when customers join in, they're joining part of this kind of big collective action to to do this thing that's good for the grid and good, you know, and will have an impact on climate as well. So, you know, two thousand is an incredible number people to get excited about the energy market and bringing down that peak demand.

That's right. And do you think there's sort of their extra benefits to it? So there's kind of not only the sort of pound or sort of fifty p to four pounds. Let's say that they get back.

There are also wider benefits for the grid. Yeah. That's right. I mean, by customers doing this, you know, if we If our customers can provide balancing at a lower cost, then that helps bring balancing cost down across the grid for everybody you know, not just people who participated or other, you know, or not just the octopus customer book, but for kind of any energy consumer in in general.

Yeah. I think to the extent that, you know, when the grid gets really stressed, that's when you start looking at kind of running gas peakers or bringing coal power stations online. So you know, grids using the demand flexibility service as a balancing tool for the winter. The other thing they're doing is they're paying five pack coal power plants up to four hundred and twenty million pounds just to stick around.

So, you know, and just to on the off chance that you might need them for a couple of hours over, you know, over the whole of winter. So one of the broader benefits is that If you can shift consumption from a peak time of stress on the grid into the later hours of the evening, or if you can get rid of that demand altogether, that's gonna have a meaningful climate benefits as well. So you wouldn't then need to turn on these coal fired power stations that are sat in reserve just in case we get to that level of demand. Where they have to turn on.

Okay. That's definitely true at scale. Great. Okay. So to ask ask another question about how this then matures.

So So we've had one demo and we had hundreds of thousands of people getting involved and we will have other suppliers joining the market and also taking part. So how How do we think this will mature over the course of winter? Do you know, do we see a story where it becomes very popular and we sort of see more people taking part in these in in in these events? Or do you think that people will kind of there's a first event and people love the sort of the sort of the fact that it's a new service and they can take part?

And do you think people will gradually stop doing it. What's your feeling? Yeah. So we started to see some of these behaviors in, you you know, the in some in a program that we ran with National Grid in February and March, So we did a smaller version of the DFS in February and March because we went to National Grid and said, look, we think our customers can help by turning down.

So let's just ask a bunch of them and see what they turned down. And, you know, we did eight events over for February, March, some in the evening, some overnight, and some in the morning. And I think some of what you're describing in terms of, are people just did in the first event, will this start to, like, snowball or will this be a kind of continued thing? I think the answer definitively right now is that that we're not sure yet.

What we started to see in February and March was that there were definitely some people who enjoyed the first event, and then after that, they kind of, you know, participated a bit less, but we also started to see a kind of stabilizing of interest and a stabilizing of demand levels where You know, we only did two or three events in each time slot, but there were early signs that there was starting to become some pattern forming behavior And I think we're looking we're thinking very deeply about how we can keep customers involved. Okay. I would say the other difference to that trial that we ran in February much was that on average, the benefits that people can get are anywhere from five to ten times higher.

So there there is a more meaningful value that can late over the winter. Okay. So can I ask a question about how it works from day to day? So so if I'm national grid and let's say, on one day a customer decides to instead of using their kettle at seven o'clock, they wait until nine o'clock to use their kettle.

Which is sort of one of the more energy intensive items you might have in your home. If if they decide to make that change, how does National Grid know that they've turned down from the day before So so for people sort of familiar with this space is sort of around baselining. So so how does National Grid know what on average that home should be using? Yeah.

So So, basically, you're right that there's a baseline.

So what, like, the metering part of this, everything goes through this sight meter. So I guess the modo listener is probably very familiar with boundary versus asset level of metering. Of course. You don't need to go down that particular rabbit hole, but essentially for metering, you know, as the utility, we receive all of the smart meter data, and that is kind of the main unit of reporting.

To tell whether there was a turn down or or not, we compare the usage during the event to the previous ten similar days. So we take an average of if the event happens on a weekday, we look at the last ten weekdays of average consumption as long as there wasn't an event. And then we say, you know, if the average was, a kilowatt hour of consumption, and they the actual was zero point four kilowatt hours, then there's a reduction there and that's the amount that that customers get paid on. So so if I was to kind of say, so if you were away on holiday last week, then it wouldn't be too much of a problem because there'd be nine weeks prior that you'd be able to use the data for because you've been a whole over ten weeks, then you've had too much of a good time and so So it's the last ten sort of consecutive days.

So if you were on holiday, the whole of the last week or if you were on holiday for the last two weeks. It might be quite hard. Then it might be quite hard. Okay.

You know, at the minute, we're we're two weeks in and we've seen two events so far. So, you know, you'll quickly kind of reset the baseline as it were. Yeah. Okay.

That's good. That's great. So so so then just to move on from DFS a little bit in terms of comparing DFS and time of use tariffs. So I think a lot of people would be familiar with sort of economy seven.

So this idea that you get cheaper energy for seven hours overnight. Do you think that this is the DFS is kind of a new tariff? So people will go for sort of a more normal tariff with DFS on top, or do you think this isn't kind of an evolution of time of use tariffs? Yeah.

Yeah. That's a great question. I mean, so for for DFS, it is a, you know, we're describing it as a customer offer. So anybody with a smart meter regardless of whatever tariff they're on, can participate as long as they're an octopus customer and the smart meter works.

So it's just a way of kind of layering on this credit on top of the existing tariff arrangement. So no one has to change, you know, they they don't have to reevaluate and move on to a a tariff that might be more or less expensive depending. It, you know, it's just there for anybody who wants to participate in. I mean, you mentioned, yeah, you mentioned time of use tariffs, and I think really this is, you know, this is part of kind of an evolution of how customer ability is going in general where octopus, you know, economy seven tariffs have been around forever.

Octopus started experimenting with time of use tariffs in twenty seventeen, twenty eighteen. So we've got kind of go, which is a sort of four hours of cheap energy use overnight. Or agile, which is the price changes every half hour depending on the day ahead energy price. So you kind of have that bucket where if you're really early adopter or say you've kitted out your home with all of the different smart meter technology, you know, you have own battery and some solar in the, you know, there there's a way to benefit through using those time of use use tariffs.

I think where this is all going in the future is a much more kind of integrated system where where actually the customer doesn't have to worry about how the energy price is changing every half hour. So we have an a tariff called intelligent octopus, where we're directly integrating with people's EVs and their electric vehicle charging equipment. And we can automatically optimize around the lowest tie cost times of charging. So all they do is tell us when they need car already by and how much charge they need the next day.

We'll calculate how much charging they need and kind of make sure that we find the lowest cost hours to to charge in, and then we return them at a low cost tariff. Now I think the really interesting thing about where the DFS sits is it kind of sits in the middle of you know, you don't have to be the world's most sophisticated energy user. You know, you just have to shift around a bit of your energy consumption. And what that does is before we have this, like, super advanced automated control, and without needing a person to be a very sort of sophisticated energy you know, geek user at home.

This is something that, you know, if you have a kettle or electric cooking or electric heating or electric hot water at home or something. You know, anybody with a smart meter can participate, and that opens it up right now to a much bigger addressable market of customers. So, you know, for us, that's one point four million. There are fourteen million electric smart meter customers around the UK.

So so what we're doing with the demand flexibility service, like, in conjunction with National Grid is really accelerating that kind of con customer led flexibility by several years ahead of, you know, where we're going to get to anyway with electric vehicles and heat pumps. Yeah. And to round that off, right? There's twenty six plus million homes as well.

So -- That's right. -- so we could be doubling that number again in terms of how many smart meters there are. That's right. So so my next sort of question is around twenty fifty.

So is when you started to think about DFS and sort of how it fits in with the other tariffs. Is this something you think will sort of still be the delivery process for this in twenty fifty? Or do you think there'd be something sort of much more automated by that? But but by the time we kind of get to that sort of net zero world and perhaps things are a lot more auton automating connected.

Yeah. Yeah. I, you know, my personal view is that we're definitely moving in a more automated direction So I think, you know, so so twenty fifty is probably, you know, is very far in the future, but I was looking there's some numbers for two thousand and thirty five. If that's not too That's not too far.

Disappointing for the crystal ball gazing that we're we're trying to see here. But So if you look at kind of what national grid projecting like consumer transformation scenario, energy demand in the home is going to increase by sixty percent. By twenty thirty five.

At that point, you will have about twelve or thirteen million electric vehicles on the road. Oh, oh, sorry. Actually, you there'll be it's actually higher than twenty million electric vehicles on the road by twenty thirty five.

And in heat pumps, you'll have almost eleven million heat pumps in the home. So so what this mean and those two things together are going to form over half of residential energy consumption.

So that's two devices in the home. That are controllable innately flexible because you can shift around a little bit at the times when you're going to use them. They don't require you know, like an internet of things kind of controller to come in and switch off your fridge, like, during times. So with, you know, we're already making great strides on automating controls for both EVs and heat pumps is kind of the next thing that we're looking at.

But, you know, if you can automate and make flexible half of customer home demand, that's just going to bring such big grid benefits in a relatively, you know, it's it's not simple, but in in a way that doesn't mean that you have to go and install and inspect things device and sort of control everything in them. Yeah. And have this massive benefit for the grid. So so so so so when it comes to the twenty thirty five point, I think you're saying that we'll get to a point where perhaps things are much more automated.

And so perhaps the need for a DFS like service DFS is is brilliant for sort of where it is today and what it's showing that we can do. But as we get to two thousand and thirty five, you think there might be sort of more built into the sort of business as usual because you'll have flexible assets like EVs, heat pumps. Yeah. I think it's also just we talked about heat pumps.

I think that's let's talk very briefly about them. So one of the one of the things that happens in terms of meeting customer demand right now is that when things get cold as they are today. You know, this is probably our sort of first cold spell in November, which is late, but it our sort of our first cold spell.

When people need to heat their home, they turn to gas gas boilers, and obviously to do net zero, that's gonna be that's not gonna be how we how we move going forward. So we're gonna bring in a lot of heat pumps. It looks like that's gonna be a really important part of the heating mix. That is going to bring a lot of demand, but also a lot of seasonal demand to the grid. And so it's the challenge we've got at the moment is meeting customer demand. But it's gonna grow because we're gonna have all these EVs and these heat pumps coming in. So do you think that sort of makes things like DFS even more important as a service?

Yeah. Absolutely. Absolutely. I think that, you know, I think this sort of ties together your the kind of previous question as well.

In the I think the way I see DFS ultimately is as a kind of accelerant to that kind of customer led, flexible future. You you know, and that's not to exclude batteries or grid scale sources of flexibility. Like, though, those will be critically important too. You know, as everybody loves to say, there is no silver bullet, but you know, I think so so I think DFS is kind of an accelerant of that kind of consumer technology.

And I think, you know, at least for sort of the next three to five years, managing that transition towards electric heating and transport. I think DFS or, you know, whatever the evolution of DFS becomes, that's going to play a critical role in, you know, helping to sort of speed up this transition and kind of get get value for customers. Yeah. Yeah.

I think that's a really I think that's a really important part. Right? So one one thing that stands out to me about DFS is just perhaps the speed that it's coming tomorrow it. So I mean within the energy sector innovation has been something that we sometimes do very well and sometimes we do sort of quite slowly.

The UK actually hate. I think has a very good record for innovation. Were there any lessons that you learned from bringing things like DFS to market that you think would be good to share as sort of good tips for other people looking to innovate in this space. Yeah.

Totally. That's a great question. I mean, so we, you know, I guess just thinking about the choreography. So we ran a trial with national grids, as I mentioned, in February and March, hundred thousand customers, about two hundred megawatts hours have turned down.

And that's that really that provided a strong reference case for what the DFS turned into. So we've kind of been supporting and help push sort of DFS along the path, but that, you know, DFS as a service has been sort of strongly led by by national grid. Like, it's definitely not an octopus thing. Like any energy company can participate in it if they want to.

But just to make that kind of link clear that we did a lot of work kind of providing that reference case, And we also supported and consulted on the design, but, you know, it's a national grid service and they very much kind of drove and led that I mean, I think DFS though, and the trial that we did is a really interesting reference case for innovations. So as you mentioned, there are lots of good innovation projects in the UK. The UK is one of the more innovative energy markets anywhere in in the world, definitely. But One, you know, the way that innovation is procured and funded sometimes is not a very good match.

To the pace of change in the energy market. So as you well know, things are changing so rapidly almost on a week by week or month by month basis. You know, there's a new kind of ancillary service that all, you know, battery owners are jumping on new strategies, that that someone's figured out something and, you know, everybody kind of goes after it. Yeah.

And, you know, with traditional innovation projects through kind of off GM funding rules. You know, it's something where you have to spend three to six months writing a proposal or possibly more you kind of you do a lot of planning and think exactly how everything's going to be spent. You create this sort of gantt chart of, you know, And then once that's approved, you're not really, you know, and that's for two to three years potentially. And once that's approved, you're not really allowed to deviate from that and you know, there's lots of reporting requirements and all of that.

So you're kind of set down this path for the next two to three years. I think the trial that we did in February and March was You know, was such an interesting reference case because, really, we got that spun up with National Grid's help in kind of eight weeks or so, you know, we had a meaningful amount of customers that were engaged. We worked with national grid to build a sort of model version of something that could be scaled up very quickly. And then we also had, like, champions and stakeholders across national grid from, you know, from the control room and, like, a broader kind of casts of characters that really believed in the or were really motivated by that.

Also, you know, we paid for it ourselves. So that meant that, you know, like, we always helps. We did do some reporting. You know, we put a lot of information out there, but it didn't mean that we had to do kind of weekly check ins and weekly progress.

So all of that created the system where we were able to move really quickly demonstrate something that could work at grid scale and actually, you know, I think that's been shown by the pace at which it's been adopted. So I think, you know, it's changed the way that we think about innovation.

You know, like, the pace of change is so quick. What steps can we do to, you know, even is it paying ourselves or finding other roots to fun stuff. Or but as a model, you know, like doing a small scale of something that can work getting buy in from national grid, having, you know, stakeholders that back it all the way through, but agile development and kind of iteration. And if it doesn't work, then stop doing it.

Don't do, like, the one and a half years left of the project. The minimum viable product. And then, yeah, and then you can pivot on to something else if it doesn't quite work. Yeah.

That's crucial to getting things out fast. It's really important to go. I think the thing I really liked in in in that description was how you kept on coming back to the trial and the data. That seems to be the sort of the really critical parts.

Everything is kind of based off that original trial. That's the data. That's the proof of concept, and then you built from there. It feels like a really critical part of of the project.

So in a kind of in a rare thing for these podcasts, we have somewhat of a live event my I can see at the corner of my my phone, and I've got a text from capacity market notices, which means one thing that there is that the system's very tight this evening and So I'm sure grid will be recalling people for provision of of energy. In an event, it's so just taking today. So do we think that let let's say grid are needing some support for this evening? Would there be would there be a notice you think coming out to octopus customers?

Yeah. I mean, that that's definitely a sort of an impressive credential when you have the live grid alerts coming directly to your phone. Yeah. So that's when you know that your for a recovering energy promotional.

Not not recovering, not recovering, sadly, like fully fledged energy geek. I think that's. Yeah. Yeah.

It's bad, isn't it?

But so but to go back, so so would that link up would sort of would it be one of the trials? Would that get called today? Yeah. So, yeah. So I think we're obviously recording this midafternoons.

There is an event today. Yes. It was triggered. It was triggered yesterday at about, like, notice were sent at two thirty.

We were confirmed at four thirty yesterday. Okay. National grids do the trial events to try and align with the time to where the grid is shortest. So so yeah.

But basically, there's an event coming tonight. Don't know how people are going to do. We've got quite a healthy number of customers signed up already for this event. So we're hoping to put on some big numbers tonight.

Yeah, we'll see. Okay. Really interesting. So do you think you'll get more than yeah, how do you think the numbers will do in comparison to your first trial? Because there was a lot of good publicity that came out from the first piece. So do you think your sort of numbers will go up for the next for the next trial.

I would love that to to be the case. Maybe yeah. I mean, I maybe I should just, put a stake in the ground and, you know, with all confidence, I think there are a few signs that the numbers may be at a similar or higher level. So I, you know, I don't know if we covered it, but, you know, in that first event, we I think I said we had almost three hundred thousand customers participating.

But the amount of demand reduction we actually got from that event was a hundred and a hundred and eight megawatt hours in a single hour period. So if you're comparing this to grid to if you to put it in grid terms, you know, that's bigger than the output of the or, you know, that's bigger than the power of the largest battery that's currently grid connected in the UK. Yep. You know, in slightly more human terms, is about the same amount as, you know, the city of Sunderland would use, you know, across period in the evening.

Yeah. Isn't it? It's an incredibly powerful tool, particularly if you can get if you can drive up the engagement, if you can get many more homes taking part and you can, as we talked about, if you can sort of enable the flexibility of heat pumps and EV to take part as well. It could be one of the critical tools to balancing networks in two thousand and thirty five, two thousand and fifty.

It it really does feel so important that we get the that we get that right. So so yeah. Yeah. Absolutely.

And I think it's I think the key point that I would make is it's not, you know, like, we want the demand flexibility service to exist and evolve and continue and, you know, be a part of flexibility in this country. I think the key thing though is, like, there is a role for consumer flexibility to play and whatever the tool's national grid has it at its disposal, you know, consumer flexibility should remain part regardless of how it's procured or what the service is or, you know, do you do start doing things like turn up to absorb renewables over or, you know, there's a bunch of stuff that could be done, but the point is, like, consumer flexibility is here now, and, you know, it should be here to stay.

Okay. Great. I have two more questions.

One is on DFS and just in terms of how if we could do one thing to improve it. What would we do? That's really good question. I mean, so we've been, you know, I think once we kind of recognize and commend national grid for the speed, with which they've moved and the vision that they've they've shown, which, you know, has been extraordinary.

I think You know, I mean, it might be slightly strange to say this as octopus and representing a utility, but I think the more utilities that get involved and the more customers across the UK that can get involved, the better. So we're starting to see you said that different utilities take some steps in. I think some people are going in big than others, but I think the more that this is available to your average energy customer, kind of the stronger a case will be made for the future, So so anything that can be done to kind of encourage broader adoption. I think that's critical.

Oh, I think I, yeah, whole wholeheartedly agree. You know, if we can get if demand flexibility in whatever form it it comes in, it becomes one of the key levers that National Grid pulls in terms of balancing the system at the tightest times. It's all the more power to it if that lever is more impactful. So, yeah, to totally agree.

But my last question is going off DFS and going to you personally. So it's a question around around if you were working in the energy industry, but you weren't working for octopus and you weren't working on DFS.

What part of the market would you would you work in? Let's say you're starting out fresh faced coming to market and saying, yep, this is where I'm gonna work. This is the nut that I'm gonna crack. Where would you choose to work?

I think so I think that there's there's there's a very long answer there's ever, like, a long and short answer to this question. I mean, I think I'm most interested in stuff that in new technology that that hasn't that has is finding market or just on the cusp of finding market and has the potential to really scale.

So, I mean, we just yeah. Yeah. I think there's I think there's loads of people in that space. I think I I asked this question a bit, but I think a lot of people do always say kind of it's that thing that's not quite there because of the challenge, because of the difficulty in working it out.

It just feels like there's something there where you could really kind of give it a note. Is that you kind of that's where you're going? Yeah. Exactly.

So, I mean, I think, you know, I mean, we were chatting just before this about kind of long duration storage, like, I think, you know, I was a physics graduate once upon a time and, like, retain a very sort of nerdy interest in that. I think there's a lot of potential there. I mean, I think you know, broader thoughts like, I was lucky enough to get to spend some time in the US. There are going to be a lot you know, the inflation reduction act is going to funnel a lot of money into renewables, electric vehicles, climate tech startups.

So I, you know, I The UK is a tremendously exciting place to be. I think the US is going to just start to see some, like, really step change growth. So I think that geographically, that is an interesting area. And then that that that's I think that's a really good answer.

I think it's also a really good place as well to wrap up the podcast because this huge amount of opportunity and growth that's coming in. And I think lots of people probably share the same view as you in terms of where to go and where to look. Well, the US particularly with the inflation reduction act is going to be critical. Yeah.

I think maybe one one lesson from, you know, I've been in companies that succeeded and companies that have felt painfully.

And I think one of my lessons is kind of looking at your addressable market size and how are you going to get customers? Because I think one of the one of the things about the UK market is it is quite a small market. If you're doing DNO technology, you have six customers and they move slowly. If you're doing utility technology, you know, there are there may be ten to twenty, twenty big ones, but a lot of them are kind of building their own sort of technologies in house.

So I think the energy sector is one where unless you have a really good sort of route to accessing kind of thousands of customers it it's hard and a lot of businesses struggle because they ultimately don't have that market size. Though, you know, if I was sort of chatting to a younger, a sort of fresh faced graduates, as you said, I would say think about, like, how big is your market size really and do you have a way of capturing those customers because that's something that a lot of companies in energy don't ultimately have and can't get because of the structure of the market. So, you know, something to really be kind of aware of.

So I think what what I wouldn't want is to bring that back into. So it sounds like tech that's just about coming to market, but also hits millions of customers. Totally agree with that. It does violate one of the rules though that it sounds like you're advocating for DFS.

So if I was to say if it was a similar technology that's sort of coming to market at scale, would you say things like heat pumps might fall into that in terms of a really large scalable market? That could be an interesting place to work, but you've also said long duration storage, which, again, I wholeheartedly agree with. That's a very interesting place to work. To I you know, I think there's I think there are a lot of tailwinds behind heat pumps accelerating is, something that we believe in a loss as a business.

So I think that could be a really kind of interesting growth area. Yeah. I think for heat pumps, the question is, like, how can you differentiate your technology from you know, are you doing anything on a technology level that's fundamentally different?

You know, and then if you are then good. If But if you're not or, like, in any case, you still have to think about your cost reduction curve and how can, you know, because heat pumps right now are going to have to, you know, they're right now, I think depending on what metric you look at, competitive with gas, but they're still going to have to keep co coming down that cost curve. So, yeah, that that's sort of my, like, if you were going to launch into the world and you heat pump business, those are questions that I would be thinking. Oh, it's a fascinating space.

It's gonna grow so quickly. It needs thousands and if not millions of engineers and new grads with exciting ideas to go into. So I actually wholeheartedly agree. Well, brilliant.

Thank you very much for coming on the mode of podcasts. You'd be a You've been a fabulous guest. And, yeah, and join us next time for our next podcast. Thanks a lot.