How Canada’s energy experiment backfired – and why smart meter Britain is next
By Paul Homewood
As residents of Ontario, Canada, look forward to the arrival of summer after months of sub-zero temperatures, they are advised to think carefully about when to fire up the barbeque.
Between the hours of 11am and 5pm on any given weekday, energy prices are more than double what they are overnight and considerably higher than in the early morning or late afternoon, according to guidance from the Ontario Energy Board, the province’s energy regulator.
When the nation’s most populous province switched over millions of households to dynamic pricing for energy in 2010 – underpinned by a rapidly completed smart meter rollout – officials believed consumers would alter their behaviour accordingly and benefit from cheaper bills.
Every ratepayer was forced to subscribe to one of three time of use (TOU) tariffs which use dynamic prices that are linked to how busy the energy grid is. Smart meters are mandatory so suppliers will always know how much energy a household is using and when.
Only the province’s “tiered” system offers anything resembling a fixed rate deal. Households are allotted a chunk of cheap energy, but when this has been used up, a more expensive rate automatically comes into effect. The third option offers very cheap overnight prices for nighttime workers and electric vehicle (EV) drivers.
But just years after the move, energy prices in Ontario were far higher and consumers had hardly changed the way they consumed energy at all.
Now a similar system could soon be widespread in Britain. Ofgem, the energy regulator, said last month that it was considering reforming the energy price cap to a dynamic model that is linked with real-time wholesale energy costs.
The regulator suggested in a report that Canadian-style TOU tariffs had already benefited consumers in the UK by allowing them to use energy when it was cheaper.
It said: “These tariffs help customers to reduce their bills by avoiding consuming electricity during peak periods, while also reducing suppliers’ wholesale costs.”
However, it remains to be seen whether reforming the energy price cap to become more like these tariffs would succeed in incentivising millions of British consumers to use energy at different times of day when it is cheaper.
Ross Anderson, Professor of Security Engineering at the University of Cambridge, said that Ontario’s system proved to be a “mad idea” that failed to change behaviour en masse.
“People were not prepared to change their electricity consumption to save a few pence. This was always a mad idea that was never ever going to work. People just didn’t care and it didn’t move the needle at all,” he said.
In 2014, four years after TOU was introduced in Ontario, a major review of the project by the Office of the Auditor General of Ontario found that it had failed to significantly bring down household energy consumption during times of day when the energy grid was historically busy.
It compared ratepayers who were moved to TOU with some 77,000 households which kept paying fixed-rate deals already agreed with suppliers, where the per kilowatt hour price of energy remains the same all the time.
“Consumption patterns of retail [fixed] and TOU ratepayers were about the same, suggesting that TOU pricing provided no more incentive to change usage behaviour than retail [fixed] contracts,” it said.
The report concluded that the dynamically priced tariffs had only had a “minor” impact on reducing demand for energy.
Consumers were also said to have complained of increased bills under TOU, while suppliers reported that many had had “limited or no ability to change electricity consumption”, especially small businesses and people who were at home during most of the day.
Even as Ontario raced towards net zero, with almost all of its energy coming from renewable sources by 2019, energy prices leapt.
Customers who paid for hydroelectric power from suppliers saw bills become so expensive that the province’s government was forced to step in and subsidise costs in 2017. TOU pricing was blamed at the time for contributing to increasing costs.
By 2016, Ontarians had seen prices rise 82pc for electricity at the peak billing periods of the day on 2010’s figures, Canadian media reported.
Overall, energy consumption at these times had fallen just 0.7pc despite the government saying it would drop by six times as much, a report by the province’s environmental commissioner found.
Today, the system remains in place. While prices for energy in Ontario were below national average last year, according to StatsCan, Canada’s official statistics agency, the move failed to substantially alter how households consume energy.
It really is a matter of commonsense.
As the Canadian experts have deduced, people simply are not going to alter their lives, just to save a few pence on their energy bills, no matter what the apologists for the renewable industry might say.
Smart meters were always intended for energy rationing, whether via punitive pricing or cutting off supply.
As the Telegraph reminds us, previous government assurances about smart meters have proved to be lies:
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NOT A LOT OF PEOPLE KNOW THAT 
In the 1980s the old Electricity Council Together with a number of Area Electricity Boards experimented with exactly the same Time of Day tariffs. The customers then did not change their consumption habits and nothing has changed. People have better things to do with their lives.
“It really is a matter of commonsense.” There is not a lot of that about in Westminster and Whitehall, otherwise we would not be in such dire straits and heading for catastrophe. It is good to be a baby-boomer, but I fear for future generations.
If time of use pricing does not work, the next step will be to turn off “smart appliances”. That should get a reaction!
We’ll have Warden Hodges roaming the streets shouting “turn out that light!” while Corporal Jones runs around shouting “Don’t Panic! Don’t panic!” every time there’s a power cut. Private Frazer will be correct proclaiming “We’re all doomed! Aye, we’re all doomed! I tell ye.” Joe Walker will be flogging contraband petrol for portable generators.
Up to 4 million smart meters do not work. Mine, installed several years ago, never has. There is no signal. The switch off of 2/3G will probably make the situation worse. Apart from a few obsessives who switch over from solar to battery to grid on a daily basis, it makes no difference as the article shows.
We should be grateful. Running washers and dryers at 3am in blocks of flats is not just bad manners and inconsiderate to neighbours. It is life threatening.
This Telegraph article is seriously flawed which makes me question its veracity.
Example, “Even as Ontario raced towards net zero, with almost all of its energy coming from renewable sources by 2019, energy prices leapt.“
This representation of generation is completely incorrect. It is very well known that almost 60% of annual (80TWh of a total 150TWh) electricity generation in Ontario is from Nuclear – that is not termed a “renewable” source. Hydro electricity (a sophisticated combined energy storage and generation system plus an excellent complement to Nuclear) supplied a further 25% of annual generation. Furthermore Ontario has 10.5GW of gas generation that is run at low utilisation factor. Solar capacity is negligible and wind is under 5GW. The high combined dominance of nuclear and hydro makes for world ranking LOWEST emissions of any large grid. Ontario is a significant nett electricity exporter to MISO, New York ISO, Quebec and Manitoba.
The reasons for TOU do not really stack up as being caused by peak demand stress (the article starts with residents “advised to think carefully about when to fire up the barbeque.” what an electric barbecue?) Ontario can readily meet demand spikes from its wealth of generating capacity and anyway the expert states it made no difference any way. This time of use smacks more of price gouging rather than demand control.
I am struggling to fully understand what the author is trying to say.
I agree. I live in Ontario and I doubted the accuracy when I read that “they are advised to think carefully about when to fire up the barbeque.“
Almost nobody uses electricity here to fire up the barbeque. Natural gas or propane dominate as a fuel.
As a good consumer I tried to shift load to off peak hours/lower tariffs. The best I could come up with was to put the hot tub filter cycles to come on at night. My experiments using timers on the power supply for freezers and fridges did not go down well. We use natural gas for heating, cooking and drying clothes.
Yes it wasn’t known as Ontario Hydro for nothing! It’s not price gouging, it’s demand reduction from existing uses to make capacity for all the forecast new demand.
Or to be able to rake it in exporting to others.
The Ontario picture. I think the timeline is GMT rather than local.
https://app.electricitymaps.com/zone/CA-ON
Let’s be honest, OFGEM is the driver in all this, to increase revenue for the Energy providers they increased the “standing charge”- without a meter, how do you calculate usage- imagine going to a petrol station and having filled up were told that the price was 79p more than the amount of fuel pumped in, and then being told the 79p was to pay for the pump being used.
So, the cards are already stacked against the consumer, the drive for Smart meters has stalled as people realise that this is not the cuddly innovation being pushed by Einstein in the TV ads but a cynical ploy to set up the Nation for Dynamic Pricing- sounds terrific and innovative until you find out that the price of energy will be assessed each and every 30mins and either increased to reduce demand or decreased should spare capacity become available- how quick will the price increase- instantly, how slow will the decrease happen……..well that all depends it appears as too what the dynamic price modelling that supports the system shows, so take it as read that what goes UP may not come DOWN, oh, just in passing, neither OFGEM or the Energy providers have confirmed how the Dynamic Pricing 30min increase/decrease will be communicated to customers, so all that “being in control” of your energy bills goes completely out of the window.
Smart meters also have a very useful built in command and control system, if required, the energy providers can instruct the meter to shut down completely, they will no doubt have a tame sounding word salad to cover this action but put simply- OFGEM and the energy providers can ration usage at the flick of a button.
Smart meters bring benefits to OFGEM and the energy providers- prices can be pushed up as and when they feel like it, supply can be suspended as and when they feel like it. This is a WIN WIN for everyone but the consumers, and it has the full support of the Government, both the present and the incoming.
Smart meters are a dumb choice, but expect legislation soon to force each and every consumer to have them or face punitive penalties including imprisonment- comply or die, what a choice (oh, currently the energy providers do have the right to force entry into private residences providing they are accompanied by the Police, upon getting entry by force, they can change meters etc without your agreement- remind you of a banana republic)
Threat of imprisonment will be a bit hollow as they are already full but I guess they might make this a political offence where they will find a place in maximum security like they do if you don’t pay your council tax.
In the US, electric utilities are regulated monopolies. They are authorized a guaranteed rate of return. Billing games not withstanding. They are going to get their money. All this happy horseshit cannot – by definition – save people money.
Not overall, but it can save money for those who have high demand that can be shifted in time. The most obvious are EV owners. They will get low prices, pensioners in all day watching TV will get high prices. As with just about all Net Zero policies, those who can afford to participate get subsidised by those who do not or cannot.
The goal is to control energy and food then control you and it’s happening all over the world. People didn’t pay much attention to Agenda 21 and it’s slowly, but surely, being implemented. One world government, Marxism, controlled by the UN is coming to your town.
Just the Western world.
Funny thing. When my neighborhood was swopped to ‘smart meters’, I got a lot of calls from neighbors whose AC had quit. “JC, can you help me?” Every single one was a burnt out transformer for the controls. Runs the thermostat, goes to a relay in the unit outside, makes the cold thing go.
Now, if TPTB decide to USE the ‘smart meters’ to curtail electricity use, I suspect that it will have the same effect. Id Est, failure of control voltage transformers all over.
I’m a nice guy. I would charge maybe $25 labor and the cost of the part (then, ~$12, more now, much more), lots of freebies.
But now? They pull this stuff and I’ve got a retirement on the Riviera.
Canada must have one of the highest “thermal fuel reserve per person” ratings in the world.
Canadian Gas Association says: As of 2022 Canada is estimated to have 1,368 trillion cubic feet of natural gas resources, an amount equal to over 200 years of current annual demand.
Perhaps the biggest issue facing Canada is their glorious leader?
Hi Micky, coming over from a different thread where you mentioned micro CHP. Boiler manufacturer Baxi used to make a gas boiler with a combined 1kW Stirling engine generator.
https://www.renewableenergyhub.co.uk/main/micro-combined-heat-and-power-micro-chp-information/baxi-ecogen-micro-chp-boiler
They discontinued it on the basis of low take up. I would think that low take up was largely caused by installers/maintenance companies unwilling to pay for the extra training course/acreditations required for the Stirling engine side of things.
Pity because it was probably launched a bit ahead of its time.
… where you mentioned micro CHP.
Thanks Ray, my limited understanding is that oil-fired micro-CHP is available in the UK; the smallest boiler / generator will apparently fit the footprint of a standard oil-fired boiler.
The possible (probable?) lack of general supportability is a concern, but I’m not adverse to some fettling providing that “event-logging” can be easily interrogated and that “control settings” can be easily adjusted.
Hi again Micky, a potential draw back with the oil fired CHP units currently available (and biomass units) is that they tend to be too powerful (electrically) for own consumption. This model is great at 18kW thermal for home and hot water heating but it simultaneously produces 8kW of electricity which is a hell of a lot more than required for one home!
https://www.cogengreen.com/sites/default/files/produit_pdf/fr_fichetechn-08ah-cogengreen-20141230.pdf
Of course it would sit perfectly well with an export tariff to the grid (or alternatively supplying a few neighbours!)
Of course it would sit perfectly well with an export tariff to the grid (or alternatively supplying a few neighbours!)
It would be a good retirement project for me! I could be the project director, construction director and director of operations for my very own power station.
My limited understanding is that thermally-generated export to the grid is not particularly lucrative, perhaps I’ll need to export to the grid using batteries as the intermediate connection.
The Telegraph article appears to be nonsense, Canada has abundant power.
The UK is a different matter and compulsory TOU pricing here will effectively be a tax on the poor. The better off will install solar, batteries, and automation and benefit by using only cheaper rate electricity leaving the proles to pick up the tab.
Unaffordable electricity will lead to meter bypassing and riots. Putting a climate change nutcase (Jonathan Brearley) in charge of OFGEM was the start of the rot. He abandoned the remit to prevent consumers from price gouging by the big 6, and implemented the governments mad net zero plan. A man with no backbone. In fact Christine Farnish resigned as a director of OFGEM because she recognised that the price cap was a stupid idea, look what happened, all suppliers charged the same price and the competitive element was destroyed.
I often wonder how this price cap sits with some CEOs of suppliers. If they all charge the same, why have “competition”? Surely one price structure control rather leads to nationalisation – doesn’t it?
Exactly, there will be a ‘run’ on good thick lengths of copper cable…..
As I’ve said before, a great number of government policies are based on the idea that large numbers of people maje quite a bit of effort to save very small amounts. But we don’t so theyvalways fail. People put a high value on laziness and not having to make an effort.
I don’t think it is laziness, but convenience. I would rather use electricity when I want to, rather than save a few pence by using it when someone else thinks I should.
Apologies for being slightly off topic but has anyone heard of The Climate and Nature Bill that is due to get its second reading on 17 May 24. It seems that my professional body is fully in suppport of this, see: https://www.cieh.org/media/obzoghhw/climate-and-nature-parliamentary-briefing.pdf?dm_i=1RSV,8LQJG,B871ER,ZNNHZ,1
I thought that the government had started to roll back on their net zero commitments but this seems to enshrine more of it in law. Amongst its provisions are:
a. to achieve specific climate and nature targets,
b. implement a strategy to achieve those targets,
c. establish a climate and nature assembly,
d. cut emissions in line with 1.5 degrees C target,
e. take responsibility for the overseas footprint,
Having checked, it turns out that it is a private members bill sponsored by a Labour MP but it may be worth keeping an eye on it.
I will be taking issue with my professional body on their stance in respect of this although I am likely to be a loan voice.
For more information on the bill see: https://www.zerohour.uk/downloads/climate-and-nature-bill.pdf
I am sorry that it links to a “zero hour” page, but the document is just the actual Bill. I did try to find it on the parliamentary website but was unsuccessful.
Reality is that if electricity prices keep going up, using less saves little or no money.
There is a flaw in the reasoning too. Daytime demand is high because that’s when most human activity occurs. Currently, night-time electricity is cheaper because we sleep, less activity, so demand is lower. This is not planned, not directed, just natural consequence.
Trying to control demand expecting Humans to behave unnaturally will not work. If BEVs and heat-pumps became dominant, then night time demand would increase as people charged their vehicles overnight and heated their homes when temperatures are lowest. Peak demand would move from day time to night.
Price is the key to balance supply and demand, but only if when demand over-reaches supply, increased prices not only temporarily dampen demand but incentivise increased supply, which then lowers prices, increases demand again to prevent over supply. It is a continuous process, meeting growing demand over time.
Our current situation involves an attempt to decrease demand permanently, and provides no incentive or intention to increase supply.
This is deliberate as it is realised that in an all-electric world, ‘green’ electricity cannot replace fossil fuels to meet current or future demand.
The only way to burn less fossil fuel, is to reduce Human activity and consume less energy across the board.
It is understandable why many see this as being about control rather than genuine environmental concerns.
Except that energy demand is inelastic.
The best idea, is to not have a smart meter – NG & Ofgem are already ramping towards ToU tariffs as part of their DSR drive to match inept intermittent renewable generation to demand, by curtailing demand, unless of course you can afford the higher tariffs
We need to change the term “Smart Meter” to “Control Meter” as control is the indeed the END game.