Ofgem incompetence?

MatWin

We cannot believe that Ofgem are allowing / enabling / inducing some energy companies to increase their E7 off-peak tariffs on Jan 1st 2023.

We have just invested in 13kWh battery system to store 0000-0700 electricity for use later in the day (and also during summer to harness all the PV solar that we can use). Our underfloor electric heating is the big user - 25kWh/day in Winter even with smart thermostat / timer control!

Does Ofgem have a strategy to encourage off-peak drawdown form the grid? If so, why are they disincentivisiing people who invest in doing so?

A competent Ofgem should be able to set up:
- nationwide tariffs (not regional, complex, spivvy variations by energy companies)
- a single smart meter model that serves all energy companies
- smart meter system that enable gas meters 10m away from the electricity meter hub to communicate through the hub

Can anyone explain the incomptence?

[Deleted User]

I think that you mean OFGem - the Office of Gas and Electricity Markets.

It is not the role of the Regulator to set national tariffs: the Government might as well set up a single energy company as competition in the market would no longer exist. 

There is a single specification for smart meters - SMETS2. These meters are supplier agnostic. Dual-band comms hubs are being rolled out to address the meter distance issue. 

To get to your main concern. I have a battery with my solar system. Octopus offers some excellent tariffs which suit battery owners and solar exporters. I fear though that these would sit in your ‘spivvy’ category:

Officer_Dibble

The incompetence is easily explained - they're a quango. The solution to quango incompetence is to give them less power, not more.

According to their website, Ofgem's remit is to "protect energy consumers, especially vulnerable people, by ensuring they are treated fairly and benefit from a cleaner, greener environment"

Consumers wouldn't be protected by nationwide tariffs - rather consumers in high density areas would end up cross subsidising consumers in areas where distribution costs are higher. It's not Ofgem's job to design smart meters either - smart meters would be even worse if it was their job. They have though helped (to an extent) to ensure that smart meters keep working when switching suppliers.

They could get involved if, for example, you were stuck on an E7 tariff that was more expensive than a regular tariff and your supplier wouldn't allow you to switch, or if another supplier had lower night rates but wouldn't let you move across to them. Where they can't help is if you want to stick to a particular supplier like Octopus because they have a relatively good SEG rate, but would like them to have the same E7 rates as EDF too. I'd love that too, but SEG rates and the balance of day and night consumption are business decisions for the suppliers, not something that Ofgem should meddle with. If you force suppliers to sell you electricity at 4p/kWh but buy it back at 15p/kWh, they're not going to stay in business for long.

MatWin

[Deleted User] said:

I think that you mean OFGem - the Office of Gas and Electricity Markets.

It is not the role of the Regulator to set national tariffs: the Government might as well set up a single energy company as competition in the market would no longer exist. 

There is a single specification for smart meters - SMETS2. These meters are supplier agnostic. Dual-band comms hubs are being rolled out to address the meter distance issue. 

To get to your main concern. I have a battery with my solar system. Octopus offers some excellent tariffs which suit battery owners and solar exporters. I fear though that these would sit in your ‘spivvy’ category:

thanks, I too have GroWatt 13kWh battery system and 4kW solar array. I used spivvy to describe the deliberately unclear pricing structures that the energy companies use with variations by regions, tariffs and the recent increases on E7.

[Deleted User]

Energy has been priced by regions since the days of the electricity and gas boards. The regional differences in charges reflect such things as the cost of gas and electricity transportation.  It is hardly ‘spivvy’. The E7 formula does appear to have been changed by Ofgem in the latest Cap review which may be down to managing the cost of Government support. 

ariarnia

[Deleted User] said:

Energy has been priced by regions since the days of the electricity and gas boards. The regional differences in charges reflect such things as the cost of gas and electricity transportation.  It is hardly ‘spivvy’. The E7 formula does appear to have been changed by Ofgem in the latest Cap review which may be down to managing the cost of Government support. 

from looking online i think because ofgem use a fixed method to work out what the cap should be and thats waited for e7 users because of the assumption most e7 users are all electric (and the relative cost of electric meaning the 'average' for an e7 house is £4000 a year but average for a gas and electric is £2500). then the government subsidy is a flat amount for electric thats the same for e7 and single rate households. 

the 'fix' isnt anything to do with ofgem in that case and would be for the government rate subsidy to be different for different tarrif types but that would make things much more complicated and i can't see it'll happen. 

MattMattMattUK

MatWin said:

We cannot believe that Ofgem are allowing / enabling / inducing some energy companies to increase their E7 off-peak tariffs on Jan 1st 2023.

E7 (and E10) tariffs are complex and their interaction with the EPG is not simple, the difference in price reflects the way that they interact with the subsidy. The fact that for some reason you cannot believe that is irrelevant. 

MatWin said:

We have just invested in 13kWh battery system to store 0000-0700 electricity for use later in the day (and also during summer to harness all the PV solar that we can use). Our underfloor electric heating is the big user - 25kWh/day in Winter even with smart thermostat / timer control!

Ok...

MatWin said:

Does Ofgem have a strategy to encourage off-peak drawdown form the grid? 

Long term it will be full ToU tariffs, currently it is E7, which still works in that way for those who use it as required, those with a reasonable proportion of their usage as night usage can currently save quite a large amount by being on E7.

MatWin said:

If so, why are they disincentivisiing people who invest in doing so?

They are not, you are failing to understand what is happening with E7.

MatWin said:

A competent Ofgem should be able to set up:
- nationwide tariffs (not regional, complex, spivvy variations by energy companies)

Nationwide tariffs would be a political rather than a regulatory decision. Regional tariffs have no real bearing on people's usage, they can use what they use, it reflects the differences in cost with supplying the different regions and they are in no way "spivvy".

MatWin said:

- a single smart meter model that serves all energy companies

A single model would be an awful idea, it would leave the industry tied to one supplier. There is one ongoing standard, SMETS2, which will work with all energy companies, there are some issues that are being worked out, but going forward switching with SMETS2 meters will not cause any issues.

MatWin said:

- smart meter system that enable gas meters 10m away from the electricity meter hub to communicate through the hub

The network uses a low power system to preserve battery life and so extend meter life. There are solutions being looked at for where gas meters are sited a significant distance from the electricity meter and these will be worked out in time, but there is no specific need to rush those through at the moment.

MatWin said:

Can anyone explain the incomptence?

In the case of your post, lack of understanding and Dunning-Kruger.

molerat

Dolor said:

Energy has been priced by regions since the days of the electricity and gas boards. The regional differences in charges reflect such things as the cost of gas and electricity transportation.  It is hardly ‘spivvy’. The E7 formula does appear to have been changed by Ofgem in the latest Cap review which may be down to managing the cost of Government support. 

That is only a reason because that is how those in power want it to be.  In the old days of the local boards it may have been down to the cost to those independent boards but the current model is not the same.

Why do you pay the same to send a letter from Lands End to John O'Groats as you do from London W7 to W8, surely the former costs more ?  The reason is because someone in power made that decision.

There is no logical reason for different energy prices across the country.

MattMattMattUK

molerat said:

Dolor said:

Energy has been priced by regions since the days of the electricity and gas boards. The regional differences in charges reflect such things as the cost of gas and electricity transportation.  It is hardly ‘spivvy’. The E7 formula does appear to have been changed by Ofgem in the latest Cap review which may be down to managing the cost of Government support. 

That is only a reason because that is how those in power want it to be.  In the old days of the local boards it may have been down to the cost to those independent boards but the current model is not the same.

The costs reflect the regional variations in supply, whilst the regions are no longer independent boards that does not mean that regional variations in costs do not exist.

molerat said:

Why do you pay the same to send a letter from Lands End to John O'Groats as you do from London W7 to W8, surely the former costs more ?  The reason is because someone in power made that decision.

Because the government forces Royal Mail to offer a universal service provision, it cost a lot more, where as couriers offer differentiated pricing reflecting the cost.

molerat said:

There is no logical reason for different energy prices across the country.

It is perfectly logical for regional pricing to reflect regional cost, just because you do not agree with it does not make it illogical. 

Eldi_Dos

It has always been a bone of contention that people who live near Hydro schemes pay more for electricity than consumers hundreds of miles away.

molerat

So the logical reason is because it has always been that way ?