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Could we see time-of-use energy tariffs by 2014?

Electricity Pylon, crossing lines

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Last month, the Committee on Climate Change (CCC) suggested charging households in the UK according to what time they use their electricity. What would the consequences be if the nation starts going timed?

The CCC was set up under the Climate Change Act in 2008, as an independent committee designed to advise the government on the best ways to tackle climate change and reach carbon emission targets.

In advising the government on how to meet carbon emission targets for 2050, they have advised that electricity in the home should be charged according to the time of day it is being used.

Those with Economy 7 meters already will be familiar with this notion – Economy 7 tariffs already charge a lower rate for electricity used during the night rather than the day.

For those who are able to run their household appliances at night or at specific times, this could be a fantastic way to save money on their energy bills.

However, there is a disparity between households that benefit from such tariffs and those who are simply penalised under them.

For instance, those who are unable to change when their white goods are run in the home, these kinds of tariffs can often turn out to be more expensive.

In addition, those with electric heaters, who can heat enough energy overnight to keep their home warm the next day, will benefit from time-weighted tariffs far more than those with gas boilers, who will not be able to do so.

There is also a question of clarity – a meter that charges at different times of day is likely to produce mass confusion about how much each electricity bill might be or how much households are being charged at different times.

The government has already set out a deadline to fit every home with a ‘smart meter’ – a electrical meter that records electricity usage at frequent intervals, often half-hourly, in order to encourage British homes to minimise the demand for energy.

Essentially, smart meters offer the possibility for both energy companies and users to monitor when their energy use is at its highest consumption, meaning that both customers and companies can accurately identify times of high usage.

It is using this smart meter roll out that the CCC suggests could provide companies with enough information to charge higher rates during high usage times to minimise consumption.

It would also allow electric cars to become a more cost-effective option as they could charge during low peak times thus reducing the amount of petrol run cars on the roads.

The ability to save money by being more energy aware would surely be beneficial to both the future and the pocket of the nation.

However, there must be viable options for busy working families already battling to keep in control of rising costs. Whether this is a negotiation of times or access to timer gadgets, this is one green energy initiative that may be able to work alongside, not against, the economy.

  • Fuel poverty should be addressed as a separate issue and not at the expense of carbon reduction and efficiency measures. The introduction of time of use tariffs will in any case save consumers over £10 billion in unnecessary capacity and distribution costs, about £500 per household. Bring it on!

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