Over the last few years, there has been a big push by the UK Government as well as energy suppliers to get more and more households to upgrade to a ‘smart meter’.
These devices have been promoted as a way for consumers to ‘save money’ on their energy bills, by being able to monitor their energy usage, as well as being ‘convenient’ as meter readings are automatically sent to your energy supplier on a regular basis.
(Because its really difficult to get your own readings from a meter and enter them in your online account!)
There has always been an ulterior motive behind this, and while questions have been raised over the years, the purpose is starting to become far more transparent.
It has always been the case that energy companies charge you for the overall amount of energy that you use (gas or electric), and regardless of whether you are on a ‘standard’ variable-rate tariff, or a ‘fixed-term’ tariff, you pay a daily standing charge, as well as a specific amount per energy unit.
No matter the time of day you use energy, your bill is calculated based on how much gas or electric you have used over a three or six month period.
The exception of course is those who have Economy7 or Economy11 electricity meters and tariffs, For these, there is a ‘day rate’ and a ‘night-rate’ – the night-rate is cheaper, however this is offset by a higher day-rate, these tariffs were designed for those households who have no gas supply and make use of storage heaters; these come on during the night, when electricity is cheaper, and then radiate stored heat during the daytime.
Either way, the price per unit is pretty much fixed.
Energy suppliers would dearly love it if they were able to vary the unit cost price, depending on the time of day when demand was at its highest, but the traditional ‘dumb meter’ didn’t give them that capability.
And of course in recent months, a lot has been said about the “cost of living crisis” with energy prices rising rapidly.
There have been some stories put out in the media in recent weeks, but the following one appeared on the BBC News website today, and it really raised my eyebrows, with some amazing inversion tactics being used!
Plan to cut energy bills if you avoid peak-time use
Households could get discounts on electricity bills if they use less energy at peak times.
National Grid hopes to roll out a scheme where people can save cash if they avoid high-power activities, such as cooking or charging electric cars, when demand is high.
The move follows a trial where Octopus Energy offered incentives for 100,000 customers who reduced consumption.
National Grid is asking all suppliers for feedback on its plans.
The company said the scheme was “not about energy rationing”, despite fears over energy supplies after Russia’s invasion of Ukraine affected oil and gas supplies to Europe.
A spokesman told the BBC the move was to “create flexibility” in its network and was part of longer term plans to not add to the level of greenhouse gases in the atmosphere.
“Plan to cut energy bills if you avoid peak-time use” – BBC News, 27th June 2022
The whole article makes for VERY interesting reading. It is typically ‘spun’ in a way that it makes out that consumers can ‘save money’ on their energy bills or be ‘rewarded’ with discounts.
Now maybe it’s just me, but I’m actually reading between the lines, and I can see that the ‘plan’ is to ultimately be able to charge consumers MORE for their energy, by being able to raise the basic energy unit cost during these ‘peak times’.
“Create flexibility” being the dead giveaway.
But how can they possibly measure this?
Your ‘traditional’ electric or gas meter just simply counts up the number of units of energy you use, it has no way of knowing what time of day those units are being used in.
If you already have a smart meter and the penny hasn’t dropped yet, you’re about to get a rude awakening.
If you’re considering getting a smart meter, you may want to think again.
Now at this time, I’m not aware of any energy companies who offer ‘special’ fixed term tariffs to customers with smart meters, but I’m pretty sure this will be the next step down the line.
Because at the end of the day, regardless of whether you have a smart meter or not, your basic unit cost is still fixed at a certain amount, regardless of the time of day.
But what I think is coming, and perhaps not that far off now, will be new tariff rates, tailored for those with or without smart meters.
Consumers without smart meters will end up with higher fixed unit costs – after all if energy suppliers cannot measure your hour-by-hour usage, they’ll just go for the ‘worst-case’ option.
The incentive will be for consumers to get upgraded to ‘smart meters’ and then you’ll get access to ‘flexible pricing’; I don’t know how this will be presented for certain, but I imagine it will be spun in a way that unit rates will be charged within a ‘range’, with the marketing emphasis being placed on “from as little as…” as is the usual trick.
And then the ‘terms and conditions’ will be worded so that energy suppliers can introduce “surge pricing” as and when they see fit. Suddenly it costs you more to boil a kettle at 7:30pm than it does at 10:20am.
This isn’t about saving consumers money, or ‘saving the planet’ by reducing carbon emissions, this is about making money, and having full control over what you can and can’t do.
The trap was set a long time ago, and more and more people are sadly falling into it.
