Will Your Electricity Costs Change Every Half Hour?

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If the media reports are to be believed, the way your electricity bill is managed will change dramatically in the next few years.

Reports today state that Scottish Power has admitted that the new smart meters will allow them to introduce tariffs which can change every half hour dependent on usage.

Although technically allowed at present, surge energy pricing is not yet available to customers as they have to opt in to share their usage data on a half hourly basis.  If an Ofgem consultation allows this data to be collected as standard it will enable surge pricing to become mainstream.

This could mean that energy prices could change on a half hourly basis with the highest prices being charged at peak times in the mornings and evenings. Watching television, cooking dinner and charging tech devices could cost considerably more at peak times.

The change of pricing may not even be based on the household usage but on that of the power grid as a whole.  At present a household can reduce their energy bills by not using so much energy.  Once surge pricing is introduced, it may not matter whether you have switched off the lights and stopped using the heater if the energy used for the television has trebled in price.

The fluctuating prices on a time of day tariff will make it more difficult for customers to be able to compare tariffs if they want to switch suppliers.  Already some consumers are finding it difficult to switch with smart meters unable to be used with competing energy companies.

The caveat that new smart gadgets will be able to interact with smart meters to reduce bills in the long run is of little use to people struggling to pay energy costs already.  It will be some time before smart gadgets are affordable and in the meantime energy costs could increase significantly.

A spokesman for the Department for Business Energy and Industrial Strategy said: “No one will be forced into switching to a ‘time of use’ tariff.” For some that is little comfort when their home is only able to be serviced by a single supplier.  It seems that rural customers are again going to be at the sharp end of any price increases.

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