Octopus Energy's Blackout Bargain Ignores Business Reality

What Jackson actually proposed, and what he left out

Octopus Energy chief executive Greg Jackson argued publicly this week against costly investments in the UK's power grid, contending that some households would accept occasional electricity blackouts if the trade-off were materially lower energy bills, as reported by the Guardian on 1 May 2026. His comments arrived almost exactly a year after the April 2025 Iberian Peninsula blackout, which knocked out trains, metros, traffic lights, ATMs, phone connections and internet access for tens of millions of people across Spain and Portugal, according to contemporaneous reporting.

Octopus Energy serves around 8 million domestic accounts, making it the UK's largest household supplier by customer numbers, according to the company's own disclosures. It has also expanded into grid-flexibility services and virtual power plants, giving Jackson a commercial interest in shifting spend away from traditional network infrastructure and towards demand-side solutions his firm sells.

What Jackson's framing omitted was any sustained consideration of commercial and industrial electricity users. Network charges currently account for roughly a quarter of a typical UK electricity bill, according to Ofgem breakdowns. Those charges fund investment governed by Ofgem's RIIO price controls, which set how much network operators can spend and recover from consumers over multi-year regulatory periods. Any policy shift that relaxed reliability standards would ripple through bills for businesses and households alike, but the consequences would not land equally.

The business cost of blackouts: beyond the household bill

For a household, a blackout lasting a few hours is an inconvenience. For a manufacturer running a continuous process, a logistics firm dependent on automated warehousing, or a retailer whose electronic point-of-sale systems go dark, the same interruption can mean lost output, spoiled inventory, contractual penalties and reputational damage.

The April 2025 Iberian blackout illustrated this starkly. Payments infrastructure failed across Spain and Portugal for hours, according to reports at the time, paralysing retail transactions and supply-chain logistics simultaneously. The incident prompted EU-wide reviews of grid resilience standards, reflecting a consensus among policymakers that modern economies have become more, not less, dependent on uninterrupted power.

UK SMEs and scale-ups face particular exposure. Many lack the backup generation or uninterruptible power supplies that larger corporates maintain. A food-processing business without standby cooling, for instance, risks losing an entire production run to a two-hour outage. The cost per kilowatt-hour saved on the bill would need to be weighed against the expected cost of disruption, a calculation Jackson did not publicly present.

The hidden multiplier: interconnected systems

Electricity outages no longer affect only equipment plugged into the mains. Telecoms, cloud computing, card payments, building access controls and security systems all depend on grid power. When the grid fails, multiple business functions fail in parallel. The Spain-Portugal event demonstrated that even mobile networks, nominally backed by battery reserves, degraded within hours. For UK businesses increasingly reliant on cloud-hosted enterprise software and digital payments, a "tolerable" domestic blackout could translate into a full operational shutdown.

Grid investment versus demand flexibility: a false choice?

Jackson's argument rests on an implicit binary: either the UK spends heavily on traditional grid reinforcement and passes the cost to bill payers, or it accepts a degree of supply interruption in return for savings. This framing suits Octopus Energy's strategic positioning. The company operates flexibility platforms that pay customers to shift demand away from peak periods, a model that competes for investment pounds with copper-and-steel network upgrades.

But most grid engineers and energy policy specialists treat network investment and demand flexibility as complements, not substitutes. The UK's National Energy System Operator (NESO) has consistently argued that both are needed to manage the transition to a decarbonised grid. Demand-side response can shave peaks and defer some reinforcement, but it cannot substitute for the baseline capacity needed to keep hospitals, data centres and continuous-process industries running through sustained weather events or equipment failures.

Ofgem's RIIO framework already requires network operators to demonstrate that proposed investments are efficient and that alternatives, including flexibility procurement, have been considered. The regulatory apparatus, in other words, already performs the cost-benefit analysis Jackson implies is missing. The question is whether the current reliability standard, which targets a loss of load expectation of no more than three hours per year on average, is set at the right level, not whether reliability should be abandoned as a design principle.

What operators should watch in the regulatory response

Jackson's intervention is unlikely to shift Ofgem's reliability standards directly, but it does feed into a live political debate about who pays for grid expansion. Several developments merit attention from finance directors and operations leaders.

RIIO-ED3 and RIIO-T3 price controls. The next round of electricity distribution and transmission price controls will set allowed network spending into the early 2030s. Submissions from network operators are expected to propose significant capital programmes to accommodate electrification of heat and transport. The scale of those programmes, and therefore the bill impact, will depend partly on the reliability standards Ofgem mandates.

Connection queue reform. Delays in connecting new generation and demand to the grid have become a bottleneck for business expansion, particularly for data centres and electrified industrial sites. Relaxing grid standards could, paradoxically, slow connections further if it introduces uncertainty about available capacity.

Insurance and continuity planning. If the political conversation shifts towards tolerating more frequent outages, businesses should expect insurers to revisit assumptions about business-interruption risk. Firms without documented continuity plans and backup power arrangements may face higher premiums or coverage gaps.

EU alignment. Post-Brexit, the UK is not bound by EU grid codes, but divergence on reliability standards could complicate electricity trading across the interconnectors that link Britain to France, Belgium and the Netherlands. The EU's post-Iberian review may tighten continental standards, widening any gap.

Jackson is right that grid costs matter and that bill payers deserve scrutiny of every pound spent on network infrastructure. But framing the debate as a household willingness-to-pay question sidesteps the commercial reality: for most UK businesses, unplanned power cuts are not a minor inconvenience to be traded against a few pounds off the quarterly bill. They are an operational risk with costs that compound quickly and unpredictably. Any serious policy discussion about grid reliability must start there.