Flexibility as a service: Can Octopus's acquisition of Uplight finally make US residential VPPs work?
Interchange Recharged
Wood Mackenzie
4.8 • 535 Ratings
🗓️ 7 April 2026
⏱️ 47 minutes
🧾️ Download transcript
Summary
Millions of enrolled devices, 60 utilities, and the participation rate gap that's been embarrassing the US market for a decade.
US residential virtual power plants have been a promising idea that's consistently underdelivered — participation rates below 5%, fragmented apps, siloed programmes, and utilities that have simply never had to compete for a customer's attention. Meanwhile, Octopus Energy has built the world's largest residential VPP in the UK, with EV driver participation rates of 50 to 70%. The question has always been whether that model can travel to a market where most customers have no supplier choice at all.
Bridget van Dorsten speaks with Nick Chaset, CEO of Octopus Energy US, about the acquisition that represents Octopus's biggest bet on answering that question: a majority stake in Uplight alongside Schneider Electric, giving Octopus access to established relationships with more than 60 US utilities — including eight of the ten largest.
Nick argues the participation gap isn't really a cultural problem or a technology problem. It's a regulatory design problem. US flexibility programmes have been built device by device, forcing consumers to juggle multiple apps and enrolments — and in some cases prohibiting them from combining assets across programmes. Octopus's answer is one app, a 30-second sign-up, and a value proposition framed entirely around what consumers actually care about: lower bills. Can that translate through a utility partnership channel rather than a direct retail relationship?
The conversation also tackles the data centre dimension. Nick makes the case that residential flexibility isn't a separate story from the large load interconnection challenge — it's part of the solution. If utilities can statistically guarantee load reductions from tens of thousands of enrolled homes during peak hours, they may be able to connect larger data centre loads at smaller interconnection points. And in many hours when a data centre might otherwise ramp down, it could simply be cheaper to pay consumers to flex instead.
Octopus's model is built on trust earned through direct consumer relationships. Can that translate through a utility intermediary at scale, across 60 different utility cultures without losing what makes it work?
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Transcript
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| 0:00.0 | Success of this partnership is first and foremost going to be measured in how many customers are we helping lower their bills. |
| 0:07.0 | That, to me, is the single most significant unit of measurement. |
| 0:10.0 | To the degree that we can establish that flexibility is the best way, most effective way, fastest way to deal with the affordability crisis. |
| 0:18.0 | That's going to give us an opportunity to scale massively, |
| 0:24.6 | because we're solving the single most significant problem that consumers have. |
| 0:27.9 | It's the single biggest concern that often regulators have. |
| 0:31.9 | And if it's a consumer problem, it's a regulator problem, it is a utility problem. I think you pointed out something that is quite interesting in terms of what I would maybe |
| 0:36.8 | chalk up to a cultural difference, |
| 0:39.3 | also like a systemic difference with the way that utilities function in the U.S. being a monopoly. |
| 0:45.6 | They care about their customers, but the customer usually doesn't have a choice. |
| 0:49.2 | So because we link the benefits of flexibility to the units of measurement that people care about, how much money |
| 0:55.5 | am I paying on my bill, and we make it really easy, and we create a single location, a single |
| 1:01.7 | experience to connect every device, we reduce massively the friction associated with participation. |
| 1:09.1 | Contrast that with the typical experience that a utility |
| 1:12.9 | offers as a result of the regulatory programs that they have been mandated to implement. And I |
| 1:20.9 | say that because I actually don't think this is a utility program design issue so much as a regulatory design issue. |
| 1:34.0 | Welcome back to the interchange recharged. |
| 1:39.5 | Virtual power plants, the idea that millions of home devices could work together to balance the grid, |
| 1:45.1 | have been slow to scale in the U.S. integration is challenging, customer engagement is low, |
| 1:50.9 | and utilities are still figuring out how to make these programs work operationally. |
| 1:56.2 | But Octopus Energy has proven a different model is really possible in the UK, |
| 2:00.4 | where they've built the world's largest residential virtual power plant with participation rates that they say are significantly higher than industry norms. |
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