MILLIONS of households could soon be offered electricity tariffs with prices that change every half hour.
“Surge pricing” on energy bills will be possible thanks to smart meters, with people paying more at peak times and less at quieter times.
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Under new powers for energy regulator Ofgem, the devices will send updates on energy usage every half hour automatically.
Anyone with a smart meter can do this now – if they opt in.
Making regular updates the default could give millions more households access to time of use tariffs.
On time of use (tou) tariffs, customers are charged more for energy at the busiest times, like evenings, and less at quieter times.
Scottish Power, EDF and Octopus Energy, which has 11million customers between them, support the changes the Telegraph reports.
According to Citizen’s Advice, billpayers could benefit from lower prices, particularly if they shift their usage to quieter times when prices are cheaper.
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But it has said that there are risks that it could make tariffs too complex and lead to higher costs for consumers.
Most energy customers are on tariffs that charge a flat rate for usage.
A small number of households with smart meters who have already opted in to half-hourly updates can access time use tariffs.
EDF, Scottish Power and Octopus are among the suppliers offering them now.
And those with Economy 7 or Economy 10 meters can get cheaper off-peak pricing.
A new trial will see thousands of Octopus Energy customers paid to cut back on their energy use at peak times.
We spoke to one man who saves money by washing his clothes at night on one of these.
It means you can save money by using electricity in quieter times, for example putting washing on over night.
Ofgem has asked energy suppliers to bring in the changes by 2025.
Customers won’t have to change to a time use tariff, but it could work out cheaper for bills.
Those who don’t sign up to time use tariffs could still benefit too.
COST SAVINGS
Spreading demand and avoiding surges in energy use (which time use tariffs would encourage) could lead to savings across the power network.
The costs of running the network are shared among everyone and efforts to reduce that would be passed on to them too.
An Ofgem spokesperson 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.”
Smart meters are being rolled out to households across the country by suppliers.
They are free and can help you lower your bill now as it lets you monitor your energy use, and adjust it accordingly.
It comes as bills are set to rise by hundreds of pounds as the cost of living crisis bites.
Wholesale gas prices have shot up globally and households in the UK face paying hundreds more from April.
The price cap which limits how much energy companies can charge per unit for electricity and gas is going up.
It means the average dual fuel bill will rise from £1,277 to £1,971 a year from April 1 – an extra £693.
Energy suppliers are offering up to £750 help for struggling Brits through hardship funds – here’s how to get the help.
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