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Ofgem gives green light to half-hourly settlement in retail electricity market

April 22, 2021
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By Paul Homewood

 

 

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Ofgem has given the green light to rolling out half-hourly settlement across the retail electricity market in Britain.

The change will enable a more flexible energy system in the country, with more accurate signals sent to suppliers from domestic customers throughout the day. This increased granularity will allow suppliers to offer new tariffs and products, which will be able to encourage more flexible energy use.

For example, more frequent meter readings could encourage time of use tariffs, automation, vehicle to grid solutions and battery storage.

By increasing flexibility, the energy industry can reduce the need for new and expensive infrastructure expansions to manage the increased electricity demand expected as transport and heating electrify.

As such, the change could save consumers an estimated £1.6 billion to £4.5 billion by 2045 the regulator suggested.

https://www.current-news.co.uk/news/ofgem-give-green-light-to-half-hourly-settlement-in-retail-electricity-market

 

Far from saving consumers money, half hourly settlement will likely raise bills for most, as punitive rates are charged during periods of high demand/low supply. Hence the reduced need for extra capacity.

The OFGEM estimate of £1.6 to £4.5bn is not annual, but for the full period 2021-2045. In other words a tiny amount compared to the cost of the smart meter roll out, heading northwards of £20bn.

Neither will this money be a “saving”. It merely means that the extra costs coming our way for decarbonising electricity won’t be quite as horrendous as they would be otherwise.

21 Comments
  1. Ian Magness permalink
    April 22, 2021 10:41 am

    “By increasing flexibility, the energy industry can reduce the need for new and expensive infrastructure expansions to manage the increased electricity demand expected as transport and heating electrify.”
    That’s a cracker of a statement within hidden meanings as follows:
    1) This is the old meme trotted out again that they seriously expect people and families to do, for example, the washing, drying and car battery charging in the middle of the night and not when you need it most of the time. Some will, of course, do this but generally “ain’t going to happen – fake news”, especially when consumers with smart meters find out that power had to be “re-balanced” away from their houses due to grid under-capacity.
    2) They are admitting that without total societal-level change (which ain’t going to happen…), the existing grid cannot cope at all and we will need gargantuan infrastructure upgrades, perhaps in every street in built-up areas at stratospheric cost – cost that ultimately the user will have to bear. Now that’s not fake news – it will happen whilst green insanity prevails at governmental level.
    By the by, does anyone know if these changes can only occur if you’ve got a smart meter (and thus the government can control you)?

  2. JimW permalink
    April 22, 2021 10:48 am

    Why is there so much stuff on STOD tariffs as if they haven’t been around since the 70s?
    In the 80s , SWEB as it as was based in Bristol, covered Devon and Cornwall. No gas. So they went bananas selling night storage heaters on E7 tariff. Then they hit a problem, a very expensive problem. The local distribution networks were designed for early evening peaks, suddenly they had many having peaks during the night many times greater than the evening peaks. There was nothing in the tariff pricing to pick up that cost. So they tried ‘split hours’ tariffs, but the heaters didn’t work well. So they had to stop the E7 drive.
    Same will happen nationally if tariffs are priced by suppliers to increase demand at low energy price times. Firstly the peak demand will increase the energy cost then the distribution companies will respond by jacking up the use of distribution charges to the supplier. Then the customer will be hit by peak charges for his use at night. Totally self-defeating.
    Why do these people think they know it all? Ask a few old wrinklies, nothimng new under the sun.
    Oh and there were many salespeople ( mainly from the States) trying to sell 1/2 hourly interactive metering back in the 80s. Many tests by the then Electricity Council. All found the same thing, the novelty for customers disolved after about a week and hardly anyone could be bothered checking prices, they had better things to do with their lives. Also many tenancies forbid use of noisy appliances between 10pm and 7am. The tech might have got a bit better ( not a lot) but people are still people.

    • Ray Sanders permalink
      April 22, 2021 11:04 am

      A friend of mine was involved in the design of the Smart meter display units. They rated the design in TtKC units i.e. time to kitchen cupboard.

      • Gerry, England permalink
        April 22, 2021 2:19 pm

        I had a clear out in my study and threw my 2 devices out that had never been put back in use since I moved in 2015. TtBin?

  3. johnbillscott permalink
    April 22, 2021 10:55 am

    Ofgem – We are here to help you – NOT

  4. tomo permalink
    April 22, 2021 11:43 am

    Green Light?

    wot?

    Like one of these?

    • Chris Ineson permalink
      April 22, 2021 12:00 pm

      Well spotted! And the little girl in the ad appears to have two fathers of indeterminate race/sexuality. Very trendy.

    • Lorde Late permalink
      April 22, 2021 1:12 pm

      I wonder what happens once you have waited for the ‘magic’ (their words) to happen and you put you car on charge or turn on the washing machine on and then go to bed?will it stay green all night or will you develop some kind of ‘green’ anxiety by having to get up regularly through the night in order to check on the colour just in case you start ruining the planet.
      just a thought.🤔.

      • tomo permalink
        April 22, 2021 8:53 pm

        For a small (and reasonable) fee, I would be prepared to engineer a non lethal, battery powered electric shock device to connect to suitable bodily appendages that applies voltage when the Green light goes off.

  5. GeoffB permalink
    April 22, 2021 11:54 am

    The wholesale price has been varying all over the place with the lack of wind, the last 12 days. I do not see allowing retail prices to run in line with the 30 minute settlement windows as a positive advantage. It really says that there is no longer going to be low cost reliable electricity supply in the UK. A huge step backwards in fact.

  6. MrGrimNasty permalink
    April 22, 2021 12:12 pm

    Yer, I’ll just postpone cooking my dinner until 3:45 am – unless too many people want to charge their car, or maybe breakfast time – unless too many people……. Oh well, raw turnip and cold baked beans again.

    Meanwhile, in the BBC alternate reality where the Ship of Fools expedition leader said on R5 this morning that Australia never had flood and drought and fires before, Breakfast announced that Earth Day was set up in the 70s to draw attention to Climate Change (said with emphasis) and the environment.

    • Mack permalink
      April 22, 2021 2:01 pm

      Was he referring to Australia, the continent that became famous the world over in the Victorian era as the land of ‘drought and flooding rains’ and, the century before, noted by Captain Cook as being continually ravaged by fires (an observation shared by the explorer Abel Tasman, a century before that, when he stumbled across the island that now bears his name off of the Australian coast)? It would seem that the Ship of Fools really did have a leader worthy of the name.

  7. bobn permalink
    April 22, 2021 12:39 pm

    OfGem is now headed by a devout climate alarmist. They sanctioned 9% energy charge increases and now they are setting up for rationing. Ofgem works against taxpayers and customers. It is unfit and the whole headoffice should be sacked. Spoiler alert – wont happen.
    Get off grid if you can.

    • It doesn't add up... permalink
      April 22, 2021 2:20 pm

      It is of course the law that they do this. Ed Miliband’s 2010 Energy Act.

  8. Patsy Lacey permalink
    April 22, 2021 12:50 pm

    Brilliant article
    https://www.telegraph.co.uk/news/2021/04/21/boriss-big-green-gamble-risks-fuelling-anew-brexit-style-revolt/
    Chickens are coming home to roost.

    • Gerry, England permalink
      April 22, 2021 2:22 pm

      Croydon residents voted against Low Traffic Neighbourhoods but the bankrupt Labour council put them in anyway.

      And councils can’t wait to make their temporary Covid schemes permanent. At least they can’t use temporary powers for Covid traffic schemes after 30 April.

  9. MrGrimNasty permalink
    April 22, 2021 2:22 pm

    The BBC reports more of the insurrection it encourages and tacitly endorses with it’s warped biased climate coverage.

    https://www.bbc.co.uk/news/uk-england-london-56843329

  10. It doesn't add up... permalink
    April 22, 2021 2:25 pm

    These tariffs will be extremely volatile. Consumers will have to pay lavishly to hedge against the volatility. Or face huge bills, like some Texans did recently. Go Griddy, anyone?

  11. Gerry, England permalink
    April 22, 2021 2:27 pm

    Couple of interesting battery car articles. WUWT says that in California they are used as second vehicles doing low mileage and probably only for the well off. Not that different here I would think. My neighbour – probably in the mistaken belief he is helping the environment – has just got a used hybrid which he will use for local trips while the family also have a proper car.

    GWPF highlighting the new Chinese battery car that is really cheap and basic but is selling fast. An uprated golf cart type thing that a recent Forbes article suggested was the only type of battery car that would really sell to be used a city run around while those with space will also have a real car.

  12. April 22, 2021 3:37 pm

    A quick fisk of the Ofgem piece:

    Propaganda: The change will enable a more flexible energy system in the country, with more accurate signals sent to suppliers from domestic customers throughout the day.
    Translation: Being able to spy inside your house, we’ll know even more precisely when peak demands are, and will be able to gouge even more from you saps at those times.

    Propaganda: This increased granularity will allow suppliers to offer new tariffs and products, which will be able to encourage more flexible energy use.
    Translation: By ‘new tariffs and products’ we actually mean more expensive ones.
    By ‘more flexible energy use’ we mean that to avoid the higher tariffs, you’ll be forced to put your washing machine on in the early hours of the morning.

    Propaganda: By increasing flexibility, the energy industry can reduce the need for new and expensive infrastructure expansions to manage the increased electricity demand expected as transport and heating electrify.
    Translation: All this green guff (whirlygigs and bird/bat fryers) is going to require eye-wateringly expensive infrastructure (which if we hadn’t fallen for the ruinables scam would have been entirely unnecessary). But we can lessen the load a bit. Isn’t that nice of us?

    Propaganda: As such, the change could save consumers an estimated £1.6 billion to £4.5 billion by 2045 the regulator suggested.
    Translation: We’re going to save you money, so be grateful, you contemptible little plebs.

  13. Phil D permalink
    April 23, 2021 10:48 am

    The purpose of smart meters was always (i) to permit real-time tariff increases, allowing the volatility of wholesale prices to be passed on the consumer; and (ii) to allow remote disconnection of selected consumers (i.e. those without expensive uninterruptible contracts) when the imbalance between supply and demand got too much for the grid to sustain.

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