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Smart meter overhaul to open gates for ‘surge pricing’

February 9, 2022

By Paul Homewood

 

 

h/t Philip Bratby/Ian Magness

 

 image

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.

https://www.telegraph.co.uk/business/2022/02/08/smart-meter-overhaul-open-gates-surge-pricing/

Claims that customers will “save up to” £4.5bn are of course highly misleading. What OFGEM really means is that the tens of billions extra which will need to be spent on intermittency will be slightly less if peak loads are reduced.

The painful reality for many will be they will be punished for using electricity when OFGEM does not want them to. It is OK for the wealthy guy with an electric car in the garage and a biomass boiler, who is out of work all day, and who in large part can avoid surging power prices during the day.

But for families with children who need heating during the day, or older people who just fancy a cup of tea while they watch daytime TV, the prospect is not so good.

One of the biggest concerns must be what controls, if any, are placed on this surge pricing. For example, can energy companies charge whatever they want, what warnings will be given, and who decides when surge pricing is used.

There must be a real fear that people just end up with inflated bills through their letter box, without any warning.

Not for the first time, this latest proposal clearly indicates just how worried the government and OFGEM are that we will shortly be facing acute shortages of power.

For years, we have had a reliable electricity grid, which has had ample reserves to meet spikes in demand and sudden drops in supply. All, of course, at very affordable prices.

Those days, it seems, will soon be behind us.

In any properly managed electricity supply system there should be more than enough spare capacity to cope with all eventualities. If OFGEM believe they need to reduce peak demand, that clearly will not be the case in future.

80 Comments
  1. February 9, 2022 5:27 pm

    If only the government & the BBC had been honest when so-called Smart Meters were first mooted, informing the public that their raison d’être was to enable Time-of-Use charging.

    • Robert Christopher permalink
      February 9, 2022 5:37 pm

      No chance, after 28Gate in 2006.

  2. JimW permalink
    February 9, 2022 5:31 pm

    Yes Paul, behind us and very deliberately so.
    The use of ‘savings’ when it means marginally not so expensive is just one example of the double speak now used all the time, We used to call it LIES!

  3. The Informed Consumer permalink
    February 9, 2022 5:32 pm

    There’s a reason it’s called “Off Peak”.

    It’s because most people don’t sit awake during the night to use “cheap” electricity!

    This is opportunistic and predatory regulation used as another sticking plaster by governments and power companies, working hand in glove, to cover up for the fact they have utterly screwed up the UK’s energy policy and National Grid.

    Our welfare state spending and government overreach in almost every aspect of our lives is decimating prosperity.

    We will all soon be working for the state handing over more and more Tax money unless a stop is put to all this nonsense.

    Personally, given the opportunity I’ll be voting for the Libertarian Party which now occupies the chasm on the right the Conservative party has left in its rush to the leftist utopia of paying for votes.

    • Duker permalink
      February 11, 2022 2:55 am

      I have that choice of power provider already. Some choose a provider with flat rate, how long that lasts I dont know
      My peak times are 7am-11am and 5Pm to 9Pm. The others are off peak including all weekend.
      Another provider I looked at had a very low 11PM to 7am overnight offpeak and slightly shorter peak times.
      the only was to use the overnight rate was really to have hot water come on at say 5:30am to 7am and store it hot water tank

  4. February 9, 2022 5:33 pm

    Honest? The two organisations you mention don’t know the meaning of the word

  5. dennisambler permalink
    February 9, 2022 5:35 pm

    No doubt they will at some point make it mandatory to have a smart meter. Until such time I will keep ignoring the letters that say my energy system needs upgrading.

    • Realist permalink
      February 9, 2022 5:51 pm

      Mandatory smart meters are already happening in some European countries.

      • Thomas Carr permalink
        February 9, 2022 6:36 pm

        Not just one but probably 2 meters , the second to know what to surcharge for the ‘juice’ to re-animate your car overnight when the renewables can be at their most feeble.

      • Mike Jackson permalink
        February 9, 2022 7:03 pm

        France for one.

    • David V permalink
      February 10, 2022 10:14 am

      I fear that at some point they will decide to charge you to install a meter. This will, no doubt, coincide with a decision to charge you the highest rate for all your electricity if you don’t have one. The trick will be to accept one just before that happens.

  6. iananthonyharris permalink
    February 9, 2022 5:36 pm

    I refuse to have one in spite of nagging by my energy company.

    • Phillip Bratby permalink
      February 9, 2022 7:45 pm

      Me neither. I have always said that smart meters are for dumb people.

      • February 9, 2022 10:36 pm

        A ‘meter’ is a passive measuring device, not an active controller. My meter will stay passive.

  7. Nicholas Lewis permalink
    February 9, 2022 5:42 pm

    Thats why I haven’t got one although i suspect that will be mandatory next if you want to be supplied!

    • Ben Vorlich permalink
      February 9, 2022 5:59 pm

      If you don’t have one they’ll assume all power was used during peak hours on whatever day of the billing cycle when electricity was most expensive. This of course means when to change to a smart meter you’ll save money, simple

      • February 9, 2022 6:38 pm

        Isn’t that called blackmail?

      • Ben Vorlich permalink
        February 9, 2022 6:59 pm

        @ilma630 Governments don’t blackmail they incentivise

    • Mikehig permalink
      February 9, 2022 6:01 pm

      That seems inevitable.
      How long before we start hearing about all sorts of “hacks” to negate this “Big Brother” function?
      These meters use the old 2/3G bandwith. Remembering how dodgy my phone signal was, I doubt it would take much to screen out the meter.
      Given the potential for remote disconnection on top of TOU charging, I expect a lot of folk will find ways to protect themselves.

      • dodgy geezer permalink
        February 9, 2022 9:41 pm

        ….send the data down the power line.. Oh, and update the software so that the meter switches off if it can’t contact base for more than 15 mins….

      • Russ Wood permalink
        February 11, 2022 2:47 pm

        When my area of Johannesburg was retrofitted with ‘smart’ meters (or else…) the idea was that they could be remotely read via a ‘Bluetooth’ frequency. All OK until, one day, all the meters in the suburb began transmitting non-stop and jamming all the frequency band. This is when you realise just how many gadgets you have that NEED to use the frequencies! Car remotes were the first, then house alarm remote, garage door or security gates, and even my outside weather station! The meter company managed to stop the constant transmission, at the expense of having a guy drive around every month with an antenna and a laptop. Then the council fired the company,. with the result that NO meters were read for over a year. Yeah – NOT-so-smart!

      • Dave Andrews permalink
        February 11, 2022 7:40 pm

        Aren’t companies and the Government in the process of abandoning 2 and 3G networks?

  8. Realist permalink
    February 9, 2022 5:58 pm

    Fridges and freezers run 24/7. Same goes for everybody with a fixed line Internet connection and many computers. Everybody will be affected by “surge pricing”

    • Phoenix44 permalink
      February 10, 2022 9:04 am

      And heat pumps run much of the time too.

    • It doesn't add up... permalink
      February 10, 2022 2:12 pm

      You will be expected to install a smart freezer that responds to a WiFi signal to switch off for a couple of hours. Extra for one that can take the temperature lower during windy episodes so it doesn’t thaw too much during the cuts. The cost of all this will exceed what sensible capacity provision would have cost, but it will be cheaper than batteries.

      • February 10, 2022 7:03 pm

        I remember an email service provider realising it was cheaper to just provide all the mailbox storage a user needed than constantly trying to manage quotas/limits. It’s also like water supply, there’s no shortage of water on earth, it’s a matter of processing (cleaing) enough and delivering it to meet demand.

  9. Penda100 permalink
    February 9, 2022 6:03 pm

    What a wonderful future awaits – watching the clock to see when you can afford to switch on the kettle. Didn’t George Orwell say something like this in 1984?

    • Mad Mike permalink
      February 9, 2022 7:00 pm

      The problem might be that the “off peak” moves on a daily basis according to usage by the population. If everybody thinks that their washing machine, for example, can run very cheaply then at 4.00 am. they will use it then and create a “peak” time. We may not know about this change but we will be charged more. It’s easy to put machines on timers so it’s quite feasible.

      • February 9, 2022 10:27 pm

        So if we had ‘smart’ washing machines where we either manually set a maximum price or an automatic ‘use at minimum price’, there’s be no guarantee if or when your washing would be done. No one can live with such uncertainty like that. It is as if electricity is turning from being a plentiful service (utility) into a scarce controller (of our lives).

      • Phoenix44 permalink
        February 10, 2022 9:06 am

        If we all switch to EVs, off peak will disappear. Pit a timer on the charger and everyone will start charging at 11pm.

  10. David permalink
    February 9, 2022 6:17 pm

    There’s nothing wrong with charging lower prices at off peak times but the law must be changed to control it. Unless the way it works is simple enough for a non mathematician to understand people will be swindled and will give up on it. There are ways to help people get good value from electric power. More nuclear and then perhaps nuclear fusion could be amazing and perhaps ways could be tried with storing energy at night in large insulated water tanks.

  11. February 9, 2022 6:26 pm

    Next stage is to make smart meters mandatory. Final stage is to cut off supply if the government or a hacker doesn’t like you.
    Putting your metre into a faraday cage would make you a criminal and again cut off your supply.
    If you even dared to think about getting a standby diesel generator or even suggesting it to others on Facebook et al.; then beware your career. Meanwhile you will get fleeced to pay for all those renewable subsidies.
    How about voting for another government? Preferably an honest one.

    • Realist permalink
      February 10, 2022 10:09 am

      The problem is the existing political parties are almost indistinguishable. A new party is needed that stops and reverses all the “green” and “climate” hysterics, not to mention the attacks on mobility i.e. anti-car taxes, regulations and excessive taxes on petrol and diesel.

  12. February 9, 2022 6:36 pm

    “the changes will let more people take advantage of lower prices at ‘off peak’ times, in turn easing demand at peak times”. Er! So how will people know when a cheaper tariff is available, and how the hell do you plan for that, day in, day out!?

    How have we lost sight of energy being a commodity we buy at an advertised price, and use, not as a tool to control our lives. Why do we allow this?

    • Colin R Brooks AKA Dung permalink
      February 10, 2022 12:26 pm

      I fear that what we have lost sight of is living in a free country.

      • Gerry, England permalink
        February 10, 2022 1:06 pm

        The majority still believe we live in a democracy. Apart from the referendum, when did the people ever exercise any power?

      • February 10, 2022 1:14 pm

        And the problem is compounded by the lack of policy distinction between the parties. They squabble at the periphery, but the substance in the same, hence needing the conservative backbenchers needing to take (back) a grip of the party, which by default now means the Johnson duo have to go.

      • February 10, 2022 2:00 pm

        Yes, we exercised power in the 2016 referendum. But ever since then the ‘establishment’ has done everything in their power to negate that decision

  13. Ian PRSY permalink
    February 9, 2022 6:51 pm

    I don’t think it’s too much of a stretch to suggest that most customers don’t know what’s in their bill, even when it’s a simple calculation of kWh x rate + days x rate. Imagine what bills will look like when the rate changes several times every day.

  14. February 9, 2022 6:53 pm

    Customers with heat pumps are in for a shock.

    The times HPs are most needed for most of the time is when electricity prices will be highest.

  15. Brian Smith permalink
    February 9, 2022 7:11 pm

    No government and definitely no commercial organisation should have this kind of authority, the power to say when and how much electricity we can use. If possible, someone needs to set up a political party in opposition to this in time for the 2024 election.

    • February 9, 2022 10:30 pm

      Wasn’t that party once called ‘Conservative’?

      • Realist permalink
        February 10, 2022 10:02 am

        A better description these days would be TINO – Tories in Name Only

      • Vernon E permalink
        February 10, 2022 11:56 am

        Under “first-past-the-post” there is not the remotest possibility of a new party getting into government. Even though I hate the idea the only way forward may well be to go to a PR system.

      • February 10, 2022 12:11 pm

        Backbench conservatives need to return to being Conservatives, and take a grip, even if that means ejecting Boris (& Carrie)

    • Vernon E permalink
      February 10, 2022 12:06 pm

      I should have added that the only realistic chance of change will come from the right wing of the Tory Party.

      • Gerry, England permalink
        February 10, 2022 1:09 pm

        We are in deep trouble if we have to rely on the Tory right to save us.

        PR is often put forward but it can often give too much power to minority parties such as Greens when deals have to be done to form a government given that PR rarely produce one winning party.

      • February 10, 2022 1:46 pm

        I’m not too convinced that any political party would vote to reduce public spending as that would mean them losing their influence

      • Micky R permalink
        February 10, 2022 2:21 pm

        “None of the above” on the ballot paper would be a good start

  16. Dave Ward permalink
    February 9, 2022 7:32 pm

    I’ll take claims this will save customers money with a large pinch of salt. The UK motor insurance industry has recently been told to stop charging long standing customers more than new ones. So you might think that new customers will now be charged full price and those of us who’ve been loyal would get a reduction. I don’t know about new business, but after years of small increases (and even the occasional reduction) my latest renewal shot up 33% compared to last year! Whatever they might say to the contrary, industry always seems to “Level UP” – not down…

  17. James Neill permalink
    February 9, 2022 7:51 pm

    There is now another article in the Daily Telegraph titled “Why you should say no to getting a smart meter.”

    https://www.telegraph.co.uk/money/consumer-affairs/why-smart-meters-bad-safe-should-say-no-2022-pro-con/

    Sadly behind a pay-wall!

    • GeoffB permalink
      February 9, 2022 8:31 pm

      just switch java script off click the little padlock next to the web address and deselect it and you should see the article but not the pictures.

      • James Neill permalink
        February 9, 2022 8:42 pm

        Thank you GeoffB. I was thinking of others who might not have a DT subscription. You have gone one better, well done!

      • February 9, 2022 11:24 pm

        Quite often, pressing the ESC key right after refreshing the page can cancel the Java Script leaving the page showing. Have to time it right though.

      • Micky R permalink
        February 10, 2022 2:20 pm

        There are several “add ons” to various browsers that disable some pay walls.

    • February 9, 2022 10:57 pm

      Managed to see the article, but it struck me that a smart meter mandate renders your private property violable, in that the ‘meter engineer’ can gain entry against your will. How can that be justified in any civil society. If the supplier makes a meter a condition of supply, that is blackmail. It would be interesting to see a court case for an injunction against a supplier from fitting a dumb meter, compelling them to offer non-smart rates and continued supply. Probably won’t happen though, as the courts are seemingly as caught up in the climate deception as any.

      • ThinkingScientist permalink
        February 10, 2022 12:35 pm

        See the song “Sons of Liberty” by excellent folk/punk artist Frank Turner.

        Lyrics include:

        That if in the smallest battles we surrender to the state
        We enter in a darkness whence we never shall escape

        And I’d rather stand up naked against the elements alone
        Than give the hollow men the right to enter in my home

        and the best lines at the end:

        So if ever a man should ask you for your business or your name
        Tell him to go and fuck himself, tell his friends to do the same
        ‘Cause a man who’d trade his liberty for a safe and dreamless sleep
        Doesn’t deserve the both of them and neither shall he keep

      • February 10, 2022 1:09 pm

        Indeed!

  18. GeoffB permalink
    February 9, 2022 8:17 pm

    OFGEM the worst ever regulator ever. Jonathan Brearley, the head was grilled yesterday by a parliamentary committee, he wriggled and squirmed for 90 minutes over the failures of so many suppliers that they had approved, the rise in the cap, he blamed everyone except OFGEM. At the end one MP ,whose name I missed, asked him about responsibility for the mess, as they had missed all the signs and maybe they should take the blame… meaning resign. Incidentally Brearley wrote the climate change act with Baroness Worthington for Ed Miliband. talk about putting the fox in charge of the chickens,,,,He has to go…

  19. MR PHILIP BENNETT permalink
    February 9, 2022 9:13 pm

    Could be a good idea as long as the maximum rate that can be charged at any time is at or below the cap! Any suggestions that the companies can set an “average” rate below cap could lead to serious overcharging.

  20. Robert Christopher permalink
    February 9, 2022 9:15 pm

    O/T but of interest as it is an external influence on the Earth:

    Geomagnetic storm blamed for the loss of 40 Starlink satellites

    However, these satellites were launched just before a geomagnetic storm commenced on Feb 4 which reached the minor G1 geomagnetic storm threshold. Geomagnetic storms temporarily warm up the thermosphere ever so slightly and this causes increased drag for satellites in low orbit.

    https://spaceweatherlive.us16.list-manage.com/track/click?u=f457949784ff982ace7c63523&id=7431de3851&e=858adaa6a5

    I like the “Geomagnetic storms temporarily warm up the thermosphere ever so slightly …”

    Just move along: nothing to see here.

    • Robert Christopher permalink
      February 9, 2022 9:38 pm

      And here’s what they don’t tell you:

      (4 minutes)

  21. dodgy geezer permalink
    February 9, 2022 9:37 pm

    It will save consumers money ONLY if they agree to use energy when the wind is blowing. At 2 in the morning.

    If they want to use energy when the wind isn’t blowing, they will have to be rich. Because only the rich will have the ability to turn the switch on when they want.

    The rich will also be able to buy Tesla batteries and store cheap energy – something the poor cannot do. Odd to see such a blatant move to advantage those who have most doesn’t seem to worry the left…

  22. Coeur de Lion permalink
    February 9, 2022 10:42 pm

    Refuse to pay. A million of us?

  23. Jordan permalink
    February 9, 2022 11:40 pm

    I see what they’ve done …. surge pricing is a hidden SURcharGE
    Smarty-pants pricing for smart metering.

  24. Gamecock permalink
    February 10, 2022 1:53 am

    Supplier games. Customers don’t care about any of this hokum. They’ll just use electricity when they want to. While demand management can reduce cost, consumers have shown for decades that they don’t care to play.

    This is a “real demand management has never been tried” moment.

    • Phoenix44 permalink
      February 10, 2022 9:13 am

      It’s a classic bureaucratic fantasy. Aggregate millions of tiny numbers and voila, huge savings to show the minister. But people don’t spend time to save themselves pennies because they implicitly value their time at a higher rate. And you don’t wait an hour to turn the oven on to save 4p.

      The CCC has nobidea how to reach Net Zero so it comes up with these preposterous schemes that will “reduce” demand.

      • Nicholas Lewis permalink
        February 10, 2022 9:49 am

        Indeed very good point. Who on earth looks at these meters anyhow there too tied up on their smartphones or Netflix. Whats more sinister, as Paul advised on a different post, is their ability to control when you use power to charge your EV. Where will that end up.

    • February 10, 2022 10:41 am

      The clue of course for the govt, regulator and suppliers is “demand”. ‘There’s none so blind as those who will not see’.

  25. February 10, 2022 3:27 am

    Renewables won’t let you manage supply so smart meters manage demand with pricing. If that wasn’t enough, elimination of gas boilers and replacing them with heat pumps means home heating arrives through the electric grid. And then there is the electrification of transportation. The current average monthly electrical use for households in the UK is just under 400 kW-hrs. An air source heat pump is estimated to use 4,000 kW-hrs annually but most of that heat will be needed in the cold months. So if you presume that most of that electricity will be consumed between November and April which means 600-700 kW-hrs on average for winter. Then there’s charging your electric car. A Tesla Mode 3 consume 0.24 kW-hrs per mile. If you drive 600 miles per month, that’s another 144 kW-hrs. to charge your car or double that for 2 earner families. So if Net-Zero is an all electric future, household consumption will be 1300 kW-hrs per month in the winter when the solar portion of renewable power is at 5% of nameplate capacity. How will Smart meters be able to manage demand in this scenario?

    • February 10, 2022 10:44 am

      And that’s the core of the question: you cannot manage what you do not have! Perhaps we should rename the policy ‘Zero-IQ’.

  26. Phoenix44 permalink
    February 10, 2022 9:02 am

    Saving us £1.6 billion eh?

    So say 30m households and 365 days in a year:

    1.6bn ÷ 30m ÷ 365 = £0.15/day.

    All off this effort, all of your effort, all the cost of smart meters, will save us 15p/day. How many of us are actually going to bother?

  27. Gamecock permalink
    February 10, 2022 11:00 am

    Don’t know how it is in the Jolly Old, but in the U.S., electric power utilities are regulated monopolies. They have guaranteed rates of return.

    They are going to get their money.

    So, if they give a discount rate to some, rates on others will perforce go up.

    Not sure that applies directly here. But one should be leery of any claims that people will save money from a utility. They are going to get their money. By law.

  28. February 10, 2022 12:02 pm

    If you haven’t read Atlas Shrugged then read it now. This is where we are now – the government controls everything , takes all your money to dole out as it sees fit (for the public good of course) and has persuaded most of the population that it is a good thing and in our own best interest.

  29. ROY BANKS permalink
    February 10, 2022 12:07 pm

    We have already spent a fortune installing the current versions of the “Smart Meter”.

    I doubt that these meters have a built in program to allow these variable rates so we will spend the next decade paying for revisiting the existing meters to change them for these “super smart” meters.

    You really can’t make this up!!!

    • Nicholas Lewis permalink
      February 10, 2022 12:29 pm

      These are a modern day scandal and its disappointing that journalists today don’t seem interested. Sunday Times would have done a deep dive back in the 80’s.

    • Mikehig permalink
      February 11, 2022 11:47 am

      Aiui, the later generation of smart meters do have the ability to facilitate charging different tariffs at different times. For example, Octopus is popular with EV owners because they offer(ed) avery low off-peak rate in the small hours: 5p per kWh, iirc.

  30. Terry Truebody permalink
    February 10, 2022 12:26 pm

    This is where we are – the government wants to control everyone and everything and take all your hard earned money to dole out to whoever they consider needs it most. They want to control all businesses and industries and dictate how they operate. All for the public good of course.
    The whole Net Zero, man-made global warming/climate change claim is a pile of horses poo. It is just lefty-greeny-eco-looney claptrap. Unfortunately there are many in the population that believe what they say. Including our once sensible Boris J. I despair.
    If you haven’t read, or watched, ‘Atlas Shrugged’ then do so now. You will not fail to note the similarity.
    And NO. I will not be getting a smart meter!

  31. Carolyn Dutton permalink
    February 10, 2022 4:46 pm

    What are the CEO of the various power companies paid AND how much is their bonus ?
    We have paid over the years to them but the government and the companies have forgotten that the UK needs its own power ,No forward planning. Putin is like Stalin holding his position because the west needs his power supplies because they forgot to source their own

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