Smart meter overhaul to open gates for ‘surge pricing’
Devices will automatically send suppliers an update on power use every half hour
Smart meters are to automatically send energy suppliers half-hourly updates on their customers’ power use in a revolutionary move that will allow “surge pricing” in millions of households’ bills.
The energy regulator Ofgem will be granted legal powers in May allowing it to change the way smart meters operate, so that information about usage is sent to suppliers every 30 minutes by default.
Suppliers will be able to use the data to change consumer energy prices as much as 48 times per day, allowing them to charge more at peak times.
The plans are viewed by industry experts as a key stepping stone towards “time of use” tariffs, which would charge customers different rates for energy throughout the day depending on demand.
This could mean that households pay more during the busiest periods, raising the possibility that they could be penalised for watching television, boiling the kettle or charging gadgets at popular times such as mornings and evenings.
Consumer rights groups have also warned that people with poorly insulated homes, old-fashioned appliances or health conditions that require round-the-clock support may lose out without safeguards.
But energy company bosses and Ofgem on Tuesday insisted the plans will ultimately benefit most customers, saving them between £1.6bn and £4.5bn overall.
This is because the changes will let more people take advantage of lower prices at “off peak” times, in turn easing demand at peak times and lowering prices for everyone.
A timeline published by Ofgem says it will formally gain the powers to introduce the changes in May. They will be implemented by 2025.
Smart meters already have the capability to send half-hourly use reports to energy providers, but at present a customer must “opt in” to switch this on. Ofgem is intending to change the rules so that the updates are on by default. Customers who do not want to share this data will have to ask to “opt out”.
Ofgem has said people who already have smart meters won’t have their preferences changed until they enter a new energy contract.
Households with a smart meter will also have to submit a mandatory reading every day, rather than once a month under the current provisions.
At present, suppliers typically do not know exactly how much power households are using throughout the day.
This means companies generally charge a flat rate for electricity and gas, although some including Octopus and British Gas have offered “free” power to customers during less busy times to encourage them to voluntarily share smart meter data.
With the advent of electric cars – which will increase pressure on the grid – understanding hourly usage patterns will become crucial.
Ideally, Ofgem and energy companies want to encourage people to use less power during the busiest periods. This would mean less investment is needed for upgrading grid infrastructure.
Greg Jackson, chief executive of Octopus Energy, said: “This change would be extremely good for consumers.
“I cannot imagine that any energy company is going to force time of use tariffs on customers, so it is like the reduced yellow-label food items at supermarkets.
“People who want a bargain can grab them, while everyone else benefits because it reduces waste.”
A spokesman for Ofgem said: “This major system upgrade is a significant milestone on Britain’s path to net zero.
“It will enable a more efficient, flexible and greener energy system which will save billions of pounds per year on all consumers’ energy bills.
“Ofgem will work closely with industry to make sure it delivers this major upgrade while ensuring those in vulnerable circumstances remain protected.”
Citizens Advice is broadly supportive as well but has previously warned that setting “normal” thresholds for energy use, and charging people more if they exceed them, could unfairly punish those who cannot easily change their habits.
“For example, energy inefficient housing with private landlords not taking action, large family sizes, or having old appliances in the home which they cannot afford to replace,” the consumer watchdog said.
“Someone’s ability to alter energy usage behaviour should also be taken into account. A dialysis patient needs a higher temperature in their home and should not be asked to compromise on that.”
Ofgem believes the changes will save all consumers money and spark a revolution in how power consumption is managed, potentially leading to peer-to-peer energy trading, gadgets that turn on at certain times and the use of electric car batteries to store household power – or sell it back to the grid.
Martin Young, an energy analyst at Investec, said the overhaul would likely prompt more suppliers to offer time of use tariffs.
He said: “Ultimately, this is all building towards a more flexible energy system and by extension flexible prices.
“But I would still think you will always still have a simple, more vanilla tariff for those who want them.”
Mr Young added that technology, such as electric cars which charge when energy is cheap and sell back to the grid at busy periods, may also cushion the impact of pricier periods on many consumers.
The changes do not affect people with standard meters.
That sounds like a fucking horrible idea. What’s to stop them surge pricing for things like sporting events half time in an England game when the kettles go on ?
Or at tea time when most folk cook ?
So another system that disproportionately effects the poor more than the wealthy.
I hope people are ready for the thin end of the capitalist wedge.
I suspect this will all be dressed up as a way of helping us save money or the environment, when in reality it will be a way of ripping us off if we want do something as radical as have dinner at dinner time.
Imagine the “surge pricing” over a busy period like say, Christmas..
There’s already people who are getting huge bills because their SM’s “forgot” to charge them for months at a time
Good thing I don’t have one. What a pointless waste of money they were, now this.
This is a bit glass half empty. This also paves the way for discounted or negative when there is surpluses supply of electricity.
When my supplier went tits up I got moved to British gas who then decided I was getting one if these installed, a quick phone call later and job cancelled.
> But energy company bosses and Ofgem on Tuesday insisted the plans will ultimately benefit most customers, saving them between £1.6bn and £4.5bn overall.
Yes, because energy companies are famously keen on saving their customers money.
Looks like it’s time to make my meter box a faraday cage
So incentivising people to consume less energy during the peak, when electricity is more expensive to produce and more carbon intense is a bad idea?
If the people who are flexible with their consumption move away from the peak, we would be reducing emissions and the price of energy for everyone.
People don’t realise how much money we would need to invest in networks and electricity production to support all the EVs and electrification of heating, without some change in consumption.
Reminds me of my army days in 2014 where to tackle high prices at peak times the MoD decided to just switch off all electricity on the barracks. The annoying part was this was at 5PM, so we’d finish work and have to sit around doing fuck all for hours. Also this meant that the kitchen didn’t work and they used paper plates with plastic cultery which is useless when you get served charcoal steak.
It wasn’t helped by the fact that the accomodation was filled with silverfish and mould, and it retained heat like a fridge.
I noticed that while my smets2 smart meter was still in set up mode and going through the meter, just to make sure it was reading correctly (to the best of my ability) that there were 24 meter rates and at that point the penny dropped, there are 24hrs in a day so potentially different charges for every hour.
It won’t take them long before they force a new meter on consumers either for anyone resisting ‘upgrading’, just needs the go ahead from OFGEM and they aren’t likely to decline the suppliers requests on this.
Wow, and I thought it was a conspiracy theory!
Good job we’ve always refused to switch to smart meters, the companies did seem far too keen on them!
I spent two years ignoring weekly calls and countless letters from SSE to get me to install a smart meter. I hope the family that came after me in that flat didn’t give in so they can at least benefit from not being ripped off in future.
It’s a bit fucking suspect that energy bosses are trying to convince us that it’s good and that the country would save billions.
That really doesn’t seem to align with their interests.
Has anyones smart meter actually worked? Whole thing was poorly implemented from the start.
All that money and they’ve started hiring people to come round and read meters again. Great work lads.
Sign me up. I’ll save at least 1.6 billion quid apparently. That’s a raise!
>Ideally, Ofgem and energy companies want to encourage people to use less power during the busiest periods. **This would mean less investment is needed for upgrading grid infrastructure.**
And there’s why this is happening.
The idea of time shifting energy use seems great for anyone not in the real world. But the rest of us need to cook dinner just before we eat, need to wash the laundry just before we hang it (to avoid it sitting in the drum damp and getting musty), and need to heat the house when it’s cold.
The flexibility to change habits is much rarer than the power companies want to pretend.
Yes, the rise of renewable has led to greater volitility in supply, and the “duck curve” is a thing that needs to be addressed, but it needs to be addressed by the power companies not the poor.
And it is the poor this will affect the most. We all know claims of saving the customers money are bogus, the power companies demand an operating profit and are allowed their margin each year by Ofgem, that will not change. The saving of one customer will be a rise for another.
And it is the poor who will be most pressured into hanging laundry at midnight, or eating their main meal at 6am or whatever it takes to game this system and fit it all around their minimum wage job.
And all so the power companies can shirk the responsibility of investment into grid level storage. It was clear long before smart meters were introduced that large scale storage capacity would be needed, but the power companies pushed for smart meters as a way they could move to surge pricing and shift the burden to customers.
I’ve been reading warnings about this for years which is why I still refuse to have smart meters.
As if it didn’t raise enough alarm bells when billion pound energy companies scrambled to get me to install them for ‘free’. Like these £900 profit per second firms care to spend the money installing them out of the goodness of their hearts.
Just like during decimalisation. Something new to confound and enable the finessing of massive price increases to a credulous public
Rationing an essential on the basis of your income, twice.
Because electricity already is rationed by millions of people due to it’s high unit cost, adding in an extra cost based on time-of-day is really rather nasty.
The Conservatives have become a parody of the Conservatives.
Ideas like this belong in a dystopian novel.
So, they want the UK energy market to become like the Texas one? That’s not going well for them and I doubt it would go well here either
Reading the contents of the article, it sounds like all that has changed is that suppliers will be able to get 30-minute readings without consent.
Suppliers then appear to have also said,’We can use this to make more flexible off-peak tarriffs’, which is not that different to the random tarriffs they have now, but they’d be tailored to different usage patterns.
Not entirely too shocking, to be honest.
ofgem site seems to be down.
405 error
probably just some ~~gremlins~~ tories in the system
>This is because the changes will let more people take advantage of lower prices at “off peak” times, in turn easing demand at peak times and lowering prices for everyone.
They always say this, but those tariffs usually end up being shit cos the daytime prices are more expensive, and ya know, we mostly do things during the day. If we’re supposed to believe they’ll be lowering prices, they really do think we’re thick, maybe we are.
I also struggle to see exactly what they’re suggesting people will actually do during those off peak times, don’t watch any TV until the middle of the night? No hot drinks in the morning? They’re basically saying if you’re poor and struggling to pay your energy bill, that you shouldn’t be allowed to do as much during the day, daytime is for rich people.
Haha, I was literally downvoted 3 days ago for saying this was one of my issues with smart meters
I remember a while back people who were skeptical of smart meters were treated as insane conspiracy theorists.
Always found it a bit sus that British Gas harass me constantly about getting one, and went as far as booking an appointment without asking me to install one (that was a ballache to cancel). Nice to feel vindicated at least!
Well shit, the tin foil hat nutters were right for once.
Sorry to be that guy, but it’s cause it costs more to make the top 10% of electricity than the base 40% at peak times. I don’t want it, but the idea is to keep the gross profit consistent, and encourage people to use power at different times if possible. Just like economy 7 meters do currently
I knew they were a bad idea 10 years ago.
I was an idiot and fell for the smart meter propaganda for my water, my house has 2 occupants, and we consistently pay more than our neighbours next door who are on the old water rates despite them being a family of 4- never again.
Surge Pricing is the scam of not telling you how much you will be charged for energy until you are actually using the energy. It is what has resulted in things such as the Enron Scandal and the failure of the grid in Texas. The Smart Meter ‘overhaul’ is simply a way of locking everyone into the predatory pricing model. The reality is: this is a sign that the fossil fuel generators are reaching the end of their viable lives as businesses.
And this is why “smart” meters are such a bad idea. If there’s no way for a customer to know how much they are going to pay for something ahead of time, then they can’t make informed decisions which is a necessary prerequisite for an efficient energy market.
It’s entirely one-sided in the benefit of providers, who can just crank the “more money” knob any time they feel like getting a bigger windfall. Want to bet on how long it takes for a powerplant to be shut down for “emergency maintenance” sending consumer rates skyrocketing during a peak event?
so if someone has a smart meter
they will be punished by surge surcharge if they use electric at a certain time? or are statistically part of a surge??
the telegraph / times lock the article so didn’t read all of it
So private industries inefficiency inability to plan the market – remember private industry was justified by being more efficient – means you pay more. The MORE inefficient they are the more you pay. Not only are they rentiers but they are outright fucking thieves.
Good thing my smart meter doesn’t work. Doesn’t get any signal so can’t send data to the supplier.
And in a year’s time, it will be “smart meters to be used to artificially control brown outs during periods of peak demand”.
The idea that the government and energy companies would recommend you do anything that might mean they get less money is hilarious and adorable.
39 comments
Smart meter overhaul to open gates for ‘surge pricing’
Devices will automatically send suppliers an update on power use every half hour
Smart meters are to automatically send energy suppliers half-hourly updates on their customers’ power use in a revolutionary move that will allow “surge pricing” in millions of households’ bills.
The energy regulator Ofgem will be granted legal powers in May allowing it to change the way smart meters operate, so that information about usage is sent to suppliers every 30 minutes by default.
Suppliers will be able to use the data to change consumer energy prices as much as 48 times per day, allowing them to charge more at peak times.
The plans are viewed by industry experts as a key stepping stone towards “time of use” tariffs, which would charge customers different rates for energy throughout the day depending on demand.
This could mean that households pay more during the busiest periods, raising the possibility that they could be penalised for watching television, boiling the kettle or charging gadgets at popular times such as mornings and evenings.
Consumer rights groups have also warned that people with poorly insulated homes, old-fashioned appliances or health conditions that require round-the-clock support may lose out without safeguards.
But energy company bosses and Ofgem on Tuesday insisted the plans will ultimately benefit most customers, saving them between £1.6bn and £4.5bn overall.
This is because the changes will let more people take advantage of lower prices at “off peak” times, in turn easing demand at peak times and lowering prices for everyone.
A timeline published by Ofgem says it will formally gain the powers to introduce the changes in May. They will be implemented by 2025.
Smart meters already have the capability to send half-hourly use reports to energy providers, but at present a customer must “opt in” to switch this on. Ofgem is intending to change the rules so that the updates are on by default. Customers who do not want to share this data will have to ask to “opt out”.
Ofgem has said people who already have smart meters won’t have their preferences changed until they enter a new energy contract.
Households with a smart meter will also have to submit a mandatory reading every day, rather than once a month under the current provisions.
At present, suppliers typically do not know exactly how much power households are using throughout the day.
This means companies generally charge a flat rate for electricity and gas, although some including Octopus and British Gas have offered “free” power to customers during less busy times to encourage them to voluntarily share smart meter data.
With the advent of electric cars – which will increase pressure on the grid – understanding hourly usage patterns will become crucial.
Ideally, Ofgem and energy companies want to encourage people to use less power during the busiest periods. This would mean less investment is needed for upgrading grid infrastructure.
Greg Jackson, chief executive of Octopus Energy, said: “This change would be extremely good for consumers.
“I cannot imagine that any energy company is going to force time of use tariffs on customers, so it is like the reduced yellow-label food items at supermarkets.
“People who want a bargain can grab them, while everyone else benefits because it reduces waste.”
A spokesman for Ofgem said: “This major system upgrade is a significant milestone on Britain’s path to net zero.
“It will enable a more efficient, flexible and greener energy system which will save billions of pounds per year on all consumers’ energy bills.
“Ofgem will work closely with industry to make sure it delivers this major upgrade while ensuring those in vulnerable circumstances remain protected.”
Citizens Advice is broadly supportive as well but has previously warned that setting “normal” thresholds for energy use, and charging people more if they exceed them, could unfairly punish those who cannot easily change their habits.
“For example, energy inefficient housing with private landlords not taking action, large family sizes, or having old appliances in the home which they cannot afford to replace,” the consumer watchdog said.
“Someone’s ability to alter energy usage behaviour should also be taken into account. A dialysis patient needs a higher temperature in their home and should not be asked to compromise on that.”
Ofgem believes the changes will save all consumers money and spark a revolution in how power consumption is managed, potentially leading to peer-to-peer energy trading, gadgets that turn on at certain times and the use of electric car batteries to store household power – or sell it back to the grid.
Martin Young, an energy analyst at Investec, said the overhaul would likely prompt more suppliers to offer time of use tariffs.
He said: “Ultimately, this is all building towards a more flexible energy system and by extension flexible prices.
“But I would still think you will always still have a simple, more vanilla tariff for those who want them.”
Mr Young added that technology, such as electric cars which charge when energy is cheap and sell back to the grid at busy periods, may also cushion the impact of pricier periods on many consumers.
The changes do not affect people with standard meters.
That sounds like a fucking horrible idea. What’s to stop them surge pricing for things like sporting events half time in an England game when the kettles go on ?
Or at tea time when most folk cook ?
So another system that disproportionately effects the poor more than the wealthy.
I hope people are ready for the thin end of the capitalist wedge.
I suspect this will all be dressed up as a way of helping us save money or the environment, when in reality it will be a way of ripping us off if we want do something as radical as have dinner at dinner time.
Imagine the “surge pricing” over a busy period like say, Christmas..
There’s already people who are getting huge bills because their SM’s “forgot” to charge them for months at a time
Good thing I don’t have one. What a pointless waste of money they were, now this.
This is a bit glass half empty. This also paves the way for discounted or negative when there is surpluses supply of electricity.
When my supplier went tits up I got moved to British gas who then decided I was getting one if these installed, a quick phone call later and job cancelled.
> But energy company bosses and Ofgem on Tuesday insisted the plans will ultimately benefit most customers, saving them between £1.6bn and £4.5bn overall.
Yes, because energy companies are famously keen on saving their customers money.
Looks like it’s time to make my meter box a faraday cage
So incentivising people to consume less energy during the peak, when electricity is more expensive to produce and more carbon intense is a bad idea?
If the people who are flexible with their consumption move away from the peak, we would be reducing emissions and the price of energy for everyone.
People don’t realise how much money we would need to invest in networks and electricity production to support all the EVs and electrification of heating, without some change in consumption.
Reminds me of my army days in 2014 where to tackle high prices at peak times the MoD decided to just switch off all electricity on the barracks. The annoying part was this was at 5PM, so we’d finish work and have to sit around doing fuck all for hours. Also this meant that the kitchen didn’t work and they used paper plates with plastic cultery which is useless when you get served charcoal steak.
It wasn’t helped by the fact that the accomodation was filled with silverfish and mould, and it retained heat like a fridge.
I noticed that while my smets2 smart meter was still in set up mode and going through the meter, just to make sure it was reading correctly (to the best of my ability) that there were 24 meter rates and at that point the penny dropped, there are 24hrs in a day so potentially different charges for every hour.
It won’t take them long before they force a new meter on consumers either for anyone resisting ‘upgrading’, just needs the go ahead from OFGEM and they aren’t likely to decline the suppliers requests on this.
Wow, and I thought it was a conspiracy theory!
Good job we’ve always refused to switch to smart meters, the companies did seem far too keen on them!
I spent two years ignoring weekly calls and countless letters from SSE to get me to install a smart meter. I hope the family that came after me in that flat didn’t give in so they can at least benefit from not being ripped off in future.
It’s a bit fucking suspect that energy bosses are trying to convince us that it’s good and that the country would save billions.
That really doesn’t seem to align with their interests.
Has anyones smart meter actually worked? Whole thing was poorly implemented from the start.
All that money and they’ve started hiring people to come round and read meters again. Great work lads.
Sign me up. I’ll save at least 1.6 billion quid apparently. That’s a raise!
>Ideally, Ofgem and energy companies want to encourage people to use less power during the busiest periods. **This would mean less investment is needed for upgrading grid infrastructure.**
And there’s why this is happening.
The idea of time shifting energy use seems great for anyone not in the real world. But the rest of us need to cook dinner just before we eat, need to wash the laundry just before we hang it (to avoid it sitting in the drum damp and getting musty), and need to heat the house when it’s cold.
The flexibility to change habits is much rarer than the power companies want to pretend.
Yes, the rise of renewable has led to greater volitility in supply, and the “duck curve” is a thing that needs to be addressed, but it needs to be addressed by the power companies not the poor.
And it is the poor this will affect the most. We all know claims of saving the customers money are bogus, the power companies demand an operating profit and are allowed their margin each year by Ofgem, that will not change. The saving of one customer will be a rise for another.
And it is the poor who will be most pressured into hanging laundry at midnight, or eating their main meal at 6am or whatever it takes to game this system and fit it all around their minimum wage job.
And all so the power companies can shirk the responsibility of investment into grid level storage. It was clear long before smart meters were introduced that large scale storage capacity would be needed, but the power companies pushed for smart meters as a way they could move to surge pricing and shift the burden to customers.
I’ve been reading warnings about this for years which is why I still refuse to have smart meters.
As if it didn’t raise enough alarm bells when billion pound energy companies scrambled to get me to install them for ‘free’. Like these £900 profit per second firms care to spend the money installing them out of the goodness of their hearts.
Just like during decimalisation. Something new to confound and enable the finessing of massive price increases to a credulous public
Rationing an essential on the basis of your income, twice.
Because electricity already is rationed by millions of people due to it’s high unit cost, adding in an extra cost based on time-of-day is really rather nasty.
The Conservatives have become a parody of the Conservatives.
Ideas like this belong in a dystopian novel.
So, they want the UK energy market to become like the Texas one? That’s not going well for them and I doubt it would go well here either
Reading the contents of the article, it sounds like all that has changed is that suppliers will be able to get 30-minute readings without consent.
Suppliers then appear to have also said,’We can use this to make more flexible off-peak tarriffs’, which is not that different to the random tarriffs they have now, but they’d be tailored to different usage patterns.
Not entirely too shocking, to be honest.
ofgem site seems to be down.
405 error
probably just some ~~gremlins~~ tories in the system
>This is because the changes will let more people take advantage of lower prices at “off peak” times, in turn easing demand at peak times and lowering prices for everyone.
They always say this, but those tariffs usually end up being shit cos the daytime prices are more expensive, and ya know, we mostly do things during the day. If we’re supposed to believe they’ll be lowering prices, they really do think we’re thick, maybe we are.
I also struggle to see exactly what they’re suggesting people will actually do during those off peak times, don’t watch any TV until the middle of the night? No hot drinks in the morning? They’re basically saying if you’re poor and struggling to pay your energy bill, that you shouldn’t be allowed to do as much during the day, daytime is for rich people.
Haha, I was literally downvoted 3 days ago for saying this was one of my issues with smart meters
I remember a while back people who were skeptical of smart meters were treated as insane conspiracy theorists.
Always found it a bit sus that British Gas harass me constantly about getting one, and went as far as booking an appointment without asking me to install one (that was a ballache to cancel). Nice to feel vindicated at least!
Well shit, the tin foil hat nutters were right for once.
Sorry to be that guy, but it’s cause it costs more to make the top 10% of electricity than the base 40% at peak times. I don’t want it, but the idea is to keep the gross profit consistent, and encourage people to use power at different times if possible. Just like economy 7 meters do currently
I knew they were a bad idea 10 years ago.
I was an idiot and fell for the smart meter propaganda for my water, my house has 2 occupants, and we consistently pay more than our neighbours next door who are on the old water rates despite them being a family of 4- never again.
Surge Pricing is the scam of not telling you how much you will be charged for energy until you are actually using the energy. It is what has resulted in things such as the Enron Scandal and the failure of the grid in Texas. The Smart Meter ‘overhaul’ is simply a way of locking everyone into the predatory pricing model. The reality is: this is a sign that the fossil fuel generators are reaching the end of their viable lives as businesses.
And this is why “smart” meters are such a bad idea. If there’s no way for a customer to know how much they are going to pay for something ahead of time, then they can’t make informed decisions which is a necessary prerequisite for an efficient energy market.
It’s entirely one-sided in the benefit of providers, who can just crank the “more money” knob any time they feel like getting a bigger windfall. Want to bet on how long it takes for a powerplant to be shut down for “emergency maintenance” sending consumer rates skyrocketing during a peak event?
so if someone has a smart meter
they will be punished by surge surcharge if they use electric at a certain time? or are statistically part of a surge??
the telegraph / times lock the article so didn’t read all of it
So private industries inefficiency inability to plan the market – remember private industry was justified by being more efficient – means you pay more. The MORE inefficient they are the more you pay. Not only are they rentiers but they are outright fucking thieves.
Good thing my smart meter doesn’t work. Doesn’t get any signal so can’t send data to the supplier.
And in a year’s time, it will be “smart meters to be used to artificially control brown outs during periods of peak demand”.
The idea that the government and energy companies would recommend you do anything that might mean they get less money is hilarious and adorable.