Thursday, 5 January 2017

What would a smart time of day tariff do for me?

Green Energy UK has just announced a new electricity tariff called TIDE which varies by the time of day [1]. For many people this will save money because the tariff is cheap at weekends. The time to avoid is 4-7pm on weekdays when electricity costs are higher. It is hard to know what this would mean for your particular household unless you have detailed knowledge of your electricity use. If you have a smart meter this information ought to be available but your in house display probably is not clever enough to give it to you - you need more advanced viewing tools. In this post I use electricity use profiles from a detailed study of different kinds of households to see what the costs would be.



This plot shows the energy profile of an average household with children, ignoring electric heating. This data is from the HES survey [2] which was captured in 2010/2011 so it is a bit out of date. The evening peak will be slightly less now because more of our lighting is low energy.

Electricity use (black line) and TIDE tariff (blue rectangles) for households with children on weekdays, averaged over the whole year.

Green Energy UK supplies green electricity so to be fair we must compare their tariff with flat rate green tariffs. At the moment I pay 12.9 p/kWh and the TIDE tariff is cheaper than this at all times except for 4-7pm on weekdays. Peak home energy use is actually later than this as you can see from the chart. You might be able to save more by shifting your consumption out of the peak period.

For example, running the dishwasher probably uses about 1 kWh. This will normally cost about 13.5p. With TIDE this will cost you 25p at peak time but only 12p at other times during the day, or 5p if you set it off after 11pm. Also the TIDE tariff doesn't have a peak time at weekends, so you will almost definitely make savings then.

Here is a chart for an average single pensioner household also during the week.

Electricity use (black line) and TIDE tariff (blue rectangles) for single pensioner households on weekdays, average over the whole year.

This household uses less electricity overall and more evenly through the day. The low tariff outside of peak times benefits this household more than the family with children. However, they may find it harder to get additional savings by peak shifting.

According to the HES profiles, both households would benefit from the TIDE tariff without any change in their normal use. The average price paid through the week would be about 12.4p/kWh for the pensioner and 12.6p/kWh for the family with children - and these are probably overestimates because quite a lot of that peak time extra energy was for lighting and we have more low energy lighting now.

Effective electricity price, based on the TIDE tariff and typical use profiles from the HES.
HouseholdWeekend p/kWhWeekday p/kWhAverage p/kWh
Single pensioner10.813.012.4
Family with children10.913.312.6

Electricity companies would like to charge us more at peak times for several reasons. Electricity prices can shoot up when demand is high and supply constrained. The wholesale price reached £1000/kWh briefly back in November when demand was high [3]. There was much less capacity margin than usual because we could not buy in from France - they have a lot of nuclear plant out of action at the moment. However, in addition to these costs our electricity suppliers have to pay for use of the supply network and those charges are related to the level of peak demand.

Reducing electricity demand at peak times saves network costs and reduces the amount of backup generation capacity we need. Smart meters and time of day pricing will encourage us to keep those costs down. Some of us will benefit more than others - and some of us can take more advantage than others. We need smart meter data to find out how much difference it will make - but we need smart meters anyway to switch to these tariffs.


[1] Take control with TIDE, our new smart time‑of‑day tariff (Green Energy UK) Jan 2017
[2] Household Electricity Survey (DECC) 2013
[3] Energy supply cuts may send fuel bills soaring (Guardian) November 2016

2 comments:

  1. You didn't include the effects of standing charges in your sums. For low users, like the pensioner household (and mine), these are significant and should not be ignored. So far as know no company makes a no-standing-charge, low-carbon tariff available in the UK. And only one company (EBICO) make a no-standing-charge (high carbon) tariff available, so that's the only UK tariff where you are not penalised for reducing total energy use (by higher per-kWh charges the lower your total consumption).

    OK it's £87.60/yr standing charge for tide. And another £91.25 for gas. If you have a £200-odd annual utility bill due to stringent efficiency measures (PV, ST, LEDs, biomass), those standard charges are nearly doubling the cost per kWh. Considering gas alone the standing charge makes each kWh cost 30p rather than the 3.6p quoted. That's a hefty penalty for low usage.

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    1. Low users will always need to look for a tariff with a low standing charge. The TIDE standing charges are similar to mine with Ecotricity. This is certainly not the cheapest tariff you can get. When time of day tariffs become mainstream there will be much better offers available.

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