Smart Meters

EssexHebridean

The first thing you learn when you are through necessity on a TOU tariff (E7 in our case) is to start shifting load to overnight. Over time (we’ve lived with E7 for nearly 20 years now, and compared to some we’re relative newbies) we’ve got to a point where we now use around 80% of our electricity use on the off-peak rate - currently a shade under 15p a unit for us. Once you’ve got your head around it it really becomes second nature, as does working out the costs of running various things on peak rate to decide if it’s of enough value to you!  As Dolor says, if you’re willing to learn the ins and outs of it and make some changes to your lifestyle (which rapidly feel very natural anyway) there are significant savings to be had - and for tariffs like Agile this is even more true.

[Deleted User]

Firstly, it's a nice juicy worm on a hook to entice people in.

Another ‘off-the-cuff’ comment with absolutely no facts or experience to back it up. 

Octopus’ Agile tariff has been around for over 4 years and the formula to convert the 30 minute wholesale price into a regional unit price hasn’t changed. The only things that have changed are the level of the Octopus self-imposed Cap and the impact of the EPG on one tariff version. Here are the Agile prices for my DNO region tomorrow:

Why wouldn’t people want to load shift for these prices? Yes, we will see an increase in the take up of these tariffs as more people accept smart meters but we are also seeing a massive growth in renewable energy. It follows that at times there will always be a surplus of power which is best sold on at a cheap price in lieu of a constraint payment.

Jyana

These goal posts keep shifting. Do most people not want smart meters, or most people will get them and all start using non-peak hours to cook, entertain, and otherwise run their households...I can't even tell any more.

GingerTim

Deleted_User said:

Dolor said:

Firstly, it's a nice juicy worm on a hook to entice people in.

Another ‘off-the-cuff’ comment with absolutely no facts or experience to back it up. 

Octopus’ Agile tariff has been around for over 4 years and the formula to convert the 30 minute wholesale price into a regional unit price hasn’t changed. The only things that have changed are the level of the Octopus self-imposed Cap and the impact of the EPG on one tariff version. Here are the Agile prices for my DNO region tomorrow:

Why wouldn’t people want to load shift for these prices? Yes, we will see an increase in the take up of these tariffs as more people accept smart meters but we are also seeing a massive growth in renewable energy. It follows that at times there will always be a surplus of power which is best sold on at a cheap price in lieu of a constraint payment.

Most things posted on discussion forums are ‘off-the-cuff’ comment. It's called 'opinion'. 

I'll expand as the 'off the cuff' version has agitated you.

It is standard practice to offer lucrative deals or even freebies when you introduce a new product and are trying to capture market share. Cheap deals, loss leaders, free samples - you name it. But once the company has captured market share the freebies and deals dry up.  This is what I mean by 'a nice juicy worm on a hook to entice people in'. My experience is 59 years of life, and the facts are what I've just presented.

The tariff may well have been around for four years but the battle is still on to get everyone onto smart meters.

The aim is to balance load by incentivising people to use energy when it's more readily available. But as the load starts to balance (i.e. as that graph starts to move towards a flat line) you can start flattening out the tariff (after all, energy companies are about maximising profit). 

So, right now they are offering an amazingly low rate for a short spell. This is because the are very keen to get people to use energy then. But as more and more people take advantage of that bargain the energy company can start edging the price up. Over time, there are less and less bargains available. Once the system is up and running properly the difference between peak rate and off peak will probably be trivial.

It's just how these things always work. The bargains are great - while they last. 

But there won't just be one company - there will be multiple competing for customers, so your beloved free market will ensure that tariffs remain competitive.

[Deleted User]

Do most people not want smart meters,

Given that we now have more than 50% of households with smart meters, I think that there is now rollout momentum. Octopus’ time-of-use tariffs are deemed experimental. Future time-of-use mainstream tariffs will most likely be based on 3 periods a day with peak; mid-peak and offpeak unit rates. These are now the norm in many countries. This is a current Spanish version (note: the Spanish siesta in the afternoon and work/eat late into the evening):

GingerTim

And then customers will just switch away to a cheaper provider.

Alnat1

@Deleted_User I believe you said you have solar but don't receive any payments for export, your choice but also your loss.

I had solar/battery system installed in March and switched to Octopus TOU tariffs in April. I opted to pay by variable DD.

Over summer the export payments built up a pot of cash in my energy account which covered gas/electric standing charges and the cost of gas for DHW heating. Now there's less solar I can make use of cheaper off-peak slots to fill up the batteries and cover my peak use.

We're now mid Nov and my energy account is still in credit by £375, no payments made at all. By my calculations I might need to actually start paying for some energy by Jan, depends how cold winter is, how much gas I use for heating and the daily prices on my TOU gas tariff.

I admit, the government £400 will be a help this time but there's no way I'd want the hassle of being off-grid at the moment, when smart meters and TOU tariffs are working so well for me.

[Deleted User]

GingerTim said:

And then customers will just switch away to a cheaper provider.

HOPEFULLY (but the way things are going, not necessarily) competition will return. 

But the bargains that you're seeing now with load balancing attempts via smart meters WON'T last. They will still give people cheap energy in order to balance the load, but with hoards of customers all clamouring to snap up those bargains they'll very soon be in a situation where a 3p discount will be enough to get the desired result. 

If one company offers much lower rates for off-peak energy they'll attract all the people looking for cheap off-peak energy - creating high peak demand during those cheap slots. That will force them to put the price up to lower demand. 

MattMattMattUK

Deleted_User said:

GingerTim said:

Deleted_User said:

Dolor said:

Firstly, it's a nice juicy worm on a hook to entice people in.

Another ‘off-the-cuff’ comment with absolutely no facts or experience to back it up. 

Octopus’ Agile tariff has been around for over 4 years and the formula to convert the 30 minute wholesale price into a regional unit price hasn’t changed. The only things that have changed are the level of the Octopus self-imposed Cap and the impact of the EPG on one tariff version. Here are the Agile prices for my DNO region tomorrow:

Why wouldn’t people want to load shift for these prices? Yes, we will see an increase in the take up of these tariffs as more people accept smart meters but we are also seeing a massive growth in renewable energy. It follows that at times there will always be a surplus of power which is best sold on at a cheap price in lieu of a constraint payment.

Most things posted on discussion forums are ‘off-the-cuff’ comment. It's called 'opinion'. 

I'll expand as the 'off the cuff' version has agitated you.

It is standard practice to offer lucrative deals or even freebies when you introduce a new product and are trying to capture market share. Cheap deals, loss leaders, free samples - you name it. But once the company has captured market share the freebies and deals dry up.  This is what I mean by 'a nice juicy worm on a hook to entice people in'. My experience is 59 years of life, and the facts are what I've just presented.

The tariff may well have been around for four years but the battle is still on to get everyone onto smart meters.

The aim is to balance load by incentivising people to use energy when it's more readily available. But as the load starts to balance (i.e. as that graph starts to move towards a flat line) you can start flattening out the tariff (after all, energy companies are about maximising profit). 

So, right now they are offering an amazingly low rate for a short spell. This is because the are very keen to get people to use energy then. But as more and more people take advantage of that bargain the energy company can start edging the price up. Over time, there are less and less bargains available. Once the system is up and running properly the difference between peak rate and off peak will probably be trivial.

It's just how these things always work. The bargains are great - while they last. 

But there won't just be one company - there will be multiple competing for customers, so your beloved free market will ensure that tariffs remain competitive.

That's true - or at least, one would HOPE that competition would return to the energy market. But the competition will be between rates across the board. 

Once you've hooked your customers and reeled them in you play with your prices until you hit that sweet spot where loads are balanced with maximum profit. And human nature being what it is it'll only take a discount of a couple of pence to get people flocking where they want them. 

They know what they're doing. Marketing and human behaviour has been researched to death. 

Human behaviour and marketing are constantly changing because people adapt, a marketing campaign from six months ago, let alone six years does not work in today's consumer environment. Most marketing tricks from a decade ago do not work today, or have to take a different form to hook people in, humans build up a tolerance very quickly and adapt.

An example is back when the internet first started, adverts used to flash, this initially drew people's attention, however after a few years of exposure people's brains subconsciously tuned out anything that flashed on a webpage as junk information, visual heat maps showed that people's conscious brains completely tuned out all flashing adverts so they were dropped. Constant sales do not work, so we are now experiencing the surge sales (Black Friday, Cyber Monday, Prime Day etc.) but these are already starting to fail as a marketing model, both engagement and spend have fallen off dramatically. 

The marketing department of all large companies, as well as many medium companies that sell to the general public now contain lots of qualified psychologists, they run multiple sample groups, the constantly tweak anything online based on pretty much real time feedback from adverts and mailings, as well as metrics from social media. The core underlying premise remains the same, people will go for what they see as a bargain, but the ways you convince them that it is a bargain is constantly changing and evolving, in marketing if you do not evolve then you die.

[Deleted User]

Alnat1 said:

@Deleted_User I believe you said you have solar but don't receive any payments for export, your choice but also your loss.

I had solar/battery system installed in March and switched to Octopus TOU tariffs in April. I opted to pay by variable DD.

Over summer the export payments built up a pot of cash in my energy account which covered gas/electric standing charges and the cost of gas for DHW heating. Now there's less solar I can make use of cheaper off-peak slots to fill up the batteries and cover my peak use.

We're now mid Nov and my energy account is still in credit by £375, no payments made at all. By my calculations I might need to actually start paying for some energy by Jan, depends how cold winter is, how much gas I use for heating and the daily prices on my TOU gas tariff.

I admit, the government £400 will be a help this time but there's no way I'd want the hassle of being off-grid at the moment, when smart meters and TOU tariffs are working so well for me.

I make sure I use all my solar in the summer. Heating water, using a dehumidifier to dry paper logs for winter, dehydrating food, canning, bottling, batch cooking etc. 

I don't want to be tied to the grid. My primary goal is to reduce - and eventually eliminate - ANY reliance on the grid.

There is a gap where off-grid is very difficult. Right in the depths of winter. No solar at all really. But at least we have a rip-roaring fire in the log burner for cooking, heat, hot water, drying washing.

That 'dark spot' in winter would typically keep me on-grid - the technology isn't really there for off-grid living all year. But I won't have a smart meter, so when they try and force me into that I'll just have to manage in winter. That will eliminate the standing charge of around £300. If I get a neighbour to charge my batteries at a little profit for them I'd get 1000kwh with that. Which would be enough. It's far from ideal, but at least it's a contingency plan.

In summer electricity is free and we don't need any gas (although we might choose to use a bit for baths).

In spring/autumn we start to need a bit of electricity (2 kwh a day maybe).but still no gas (again maybe the odd bath)

In winter we are more inclined to use gas to heat water. We need about 3.5 kwh electric a day on average.

As I've explained in a previous post - those off-peak bargains won't last long. Enjoy it while you have it, but long term the price difference between peak and off-peak will by miniscule. This HAS to be the case. Because if the bargain is too good it'll turn off peak into peak. Their goal is load balancing and once they've got plenty of customers chasing the cheap slots they'll only need discounts of a couple of pence to get people flocking where they want them. That is their goal, because that's what will lead to flattened demand.