The first 'time of use' tariff in the UK

Signal of change / The first 'time of use' tariff in the UK

By Gemma Adams / 08 May 2017

Green Energy has launched Tide, an online-only energy tariff that rewards households for shifting their energy demand away from peak times by using the timers on their washing machine or dishwasher and powering their electric car overnight.  Customers pay a variable rate for their electricity and gas depending according to the time of day they use it: £0.05 (6 US cents) per kWh tariff for seven overnight hours and a £0.25 (30 US cents) figure for 16.00 to 19.00 on weekdays. Intermediate times are priced at £0.12. 

Chris Goodall says of the tariff, “Very roughly, a typical household taking the new Green Energy package will pay about £570 for electricity compared to about £580 for the Scottish Power tariff, the cheapest mainstream supplier at the moment. The difference is therefore small but the gap is widened if the household takes deliberate action to move its energy use out of the penal 3 hour weekday tariff between 16.00 and 19.00." 

Goodall says cooking is the largest single element across the week at 121 watts, with audiovisual kit next at 92 watts. Cold appliance and washing and drying machines follow at between 60 and 70 watt each. These power uses could easily be pushed outside of peak periods. Fridges, for example, can be automatically turned off for three hours with no impact on food quality. It should be easy to reduce typical demand by 150 watts in the peak period and this would increase the saving to around £25, making the Green Energy tariff probably the cheapest in the UK at the moment.” 

So what?

As we electrify heat and transport this is creating ever more ‘peaky’ peaks of demand that force extra power stations onto the system to supply them. Very gradually, new technologies such as smart meters are making it possible for electricity retailers to introduce ‘time of use’ (ToU) pricing for homes and small businesses, helping to bring prices closer to the underlying cost of generating energy across each day and across the seasons. This will help to smooth out the peaks of demand, meaning that fewer power stations are needed to run the system overall, making it more efficient.

Sources

https://www.carboncommentary.com/blog/2017/1/10/the-first-time-of-use-tariff-in-the-uk-will-it-save-users-money

What might the implications of this be? What related signals of change have you seen?

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