British Gas to offer 5th Time of Use Tariff

Legacy_user

OFGEM has issued a derogation which allows BG to have a 5th electricity tariff specifically for customers with a smart meter. The tariff will be based on time of use kWh charges.

https://www.ofgem.gov.uk/sites/default/files/docs/decision_-_bg_derogation_from_slc22b2bi_redacted_version_30_11_2015.pdf

The link is playing up - sorry:

We received a satisfactory submission on 11 June 2015 from the Licensee requesting a derogation from paragraph 2(b)(i) of SLC 22B of its gas supply licence. The Licensee wants to encourage the take up of smart meters. To help achieve this, it has designed XXXXXXXXXXX. The central element of the scheme is a Time-of-Use (ToU) electricity tariff which is offered to consumers with smart meters

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ToU tariffs are energy tariffs with different prices at different times of the day. Consumers who sign up to the XXXXXXXXXXXXX will have an electricity smart meter installed at their premises.

NB. BG wants to offer a 5th gas tariff to dual fuel users with TOU electricity charges.

[Deleted User]

The Borough of Coleraine in Northern Ireland ran a trial of 200 customers with smart meters using TOU tariffs between Jan 2012- May 2014 which resulted in 79% preferring the TOU tariffs.

molerat

https://www.ofgem.gov.uk/publications-and-updates/decision-grant-british-gas-trading-limited-temporary-derogation-certain-standard-conditions-its-gas-supply-licence-respect-its-new-tariff-due-be-launched-2016

Looks like a direct link to the pdf does not work but a link to the subject page with the link in does

System

Be interesting to see whether this is the beginning of the end of 3rd party comparison sites. The only way that a consumer will be able to see whether TOU will save money is for a comparison site to look back over a historical record of time of day usage taken directly from the smart meter.

Extract from a report commissioned by OFGEM in 2104:

The rollout of smart meters will enable energy suppliers to deploy new time of used based approaches to pricing electricity for households. The ability of consumers to engage positively with TOU tariffs depends on how households currently use electricity, their ability to shift demand over the day/week/season, and the range of TOU products on offer to suit the needs of different households. The work presented here shows how certain groups of households might be made better or worse off under a set of illustrative TOU tariffs, assuming no behaviour change.
The cluster analysis identified three main patterns of electricity use within the set of EDRP cases it was based on. There will be other customers who display different usage use patterns, such as nightworkers, houses in multiple occupancy, etc. Furthermore the analysis excluded PC2 customers who could be expected to have higher demand over the night, and who effectively are already on a TOU tariff, albeit a fairly simple one.
By definition, those who will benefit from TOU tariffs either already use more electricity at cheaper times of day, or are willing and able to shift their demand accordingly. In the illustrative TOU tariffs used in this work, those households that are best off are those with below average consumption at peak times. Other potential tariff structures, such as free Saturdays/weekends, tariffs focused on electric vehicle charging, or network-led tariffs, would benefit other groups.
It is essential to ensure that consumers are well-informed about their energy use before considering switching to a TOU tariff. Smart meters and related energy services have the potential to support this, but education will be crucial to ensure consumers are moving onto the right tariff for them, in a way that enables the industry to realise increases in overall efficiency by reducing the aggregate peak:base load.

Richie-from-the-Boro

Nightworkers dayworkers retired, all have different TOU needs particularly those on electric only households such as NSCH. I have long argued on these boards for combined 'smarts' and TOU purely for the benefits they should bring to current E7 tariff users. While on-peak and off-peak times vary between tariffs, regions and seasons the TOU tariff would increase competition between suppliers with a cheaper more flexible option particularly on a weekend daytime to both the supplier and householder alike.

The menu of options offered by suppliers marketing their warez might differ but a starting point would be that the average 17 hours worth of stored heat could be delivered to a storage heater at any time not just from 00.00 to 07.00. One bonus for GOV and the nation would be a substantial real-time immediate contribution to shaping energy security by having the almost 2 million lower income / fuel poor NS users store 34 million hours of electricity per night in the form of heat at any one time.

- 1.8m electric heating households in England [8%] Scotland, [13%], Wales, less than 100,000 [5%]
- in Britain, 25% of flats compared to only 4% of houses
- space heating 66% water heating 17%, lighting and appliances 15% of all total UK domestic consumption
- NS and other direct electric have a lower average EPC, and so .. .. higher costs
- income tends to be £14.5k or less which means these households are more likely to be fuel poor
- since 05, domestic gas has risen by 120%, electricity prices 75% and liquid heating fuels by 100%

The sad fact of the matter is that of the few TOU tariffs that exist 30% do not get any benefit at all from cheaper electricity.

System

Richie-from-the-Boro wrote: »

The sad fact of the matter is that of the few TOU tariffs that exist 30% do not get any benefit at all from cheaper electricity.

A very good point. I was reading another Ofgem report last night that suggested that those who would benefit most will be consumers already on a ToU tariff (e.g. E7 users) or consumers that are prepared to change their power usage habit. Sadly, the trials that have been done to date - and experience in parts of Canada and Florida which have ToU tariffs - is that old habits are hard to change; i.e., consumers don't want to delay feeding their kids until after 7pm or to do the ironing before going to bed.

Following the introduction of ToU tariffs in Toronto for example, complaint numbers have risen as a result of customers thinking that they would save money only to find that their electricity bill has increased.

[Deleted User]

So I will benefit by being willing to change my habits, good, I will do ( or she will do) my ironing at 7.01 pm, also I will use the dishwasher/dryer/shower at the low rate.
I m surprised that the figure of people who will not get a benefit to ToU is as low as 30% seeing that over 60% ,or even 70% of non savvy consumers are still on standard tariffs while I m on prob one of the cheapest electric in the UK at 8.25 p/kwhr and I will be even cheaper on a ToU tariff. Look to the positives, and lets keep emotive stuff like"feeding kids " out of it please. ToU will reflect the true costs of peak period generation, so I will change my habits. Education for consumers about smart meters is important but its more important to educate users away from standard tariffs and that has nt happened. The Northern Irish trial was a success for ToU with lower prices and lowered usage.
Quoting rising prices in Ontario Canada is nt a fair comparison as Canada has not far off the cheapest electricity in the world at approx 10 cents a kwhr, half the UK price so I would expect the Torontians to squeal a bit with a rise.

Richie-from-the-Boro

HiYa Hengus & Sacsquacco,

My only initial beef with the whole notion is the legislated consumer protection and big-fist regulation of both the standards and the combative tariffs between providers will not be put into place in the first case. Its got to work for all parties and the consumer will always be unprotected and 'milked' if GOV is not my protector before any country wide rollout begins, wimpy input from consumer organisation even for example as big as 'which' and 'CAB' are always sidelined and long-grassed by the power of the energy lobby.

I see no reason at all why the leccy only peak load TOU should not demand a change of use behaviour from the domestic use customer - that's [behavioural change] the whole point of TOU. Those who can not or will not change their day-use behaviour will not benefit from a switch to TOU and that's the way it should be. Put at its simplest I don't care which 24/24 hours per cycle my 150 litres of stonking 60 °C hot water is recharged ditto my 34 associated 'bricks' that store [brick capacity is 0.84 - so 30 seconds of 3.4kw heats these bricks by 1°C] my heat.

In fairness to others reading this I have no interest in gas and certainly no interest in accommodating so called 'greening' community initiatives nor to the carbon lobby if I had my way we would have always been nuclear 80% and 20% others. Linked TOU 'smart-grids' have a lot of mileage in it for my heating type I am and have always been a supporter.