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Should we have peak-time energy tariffs?

Clock under lightening

Experts are recommending varying energy prices throughout the day. Is this a genius way to cut our bills and help the environment – or is it unfair on those who can’t pick and choose when to do their washing?

How would you feel about your energy company remotely switching off your freezer for half an hour a day? Before you start panicking about losing all your food in a pool of water, hear me out.

This is just one suggestion that has come about from a report by The UK Committee on Climate Change (CCC), which is recommending a new system that charges varying energy prices throughout the day.

What are time-of-use tariffs?

You might have heard of ‘economy 7’ – the current system that gives customers with a special meter a cheaper tariff late at night. If CCC gets its way, new time-of-use tariffs could be introduced from 2014, potentially meaning even more prices at different times of day.

The scheme would rely on smart meters being installed, letting your utility company to see minute-by-minute information about your energy consumption. It would also mean that, with your agreement, they could remotely switch off appliances such as water heaters or freezers for short periods to manage demand. (Which, incidentally, is perfectly safe.)

This all sounds great in theory, doesn’t it. Switch things off to save money and use energy-heavy appliances, like dishwashers and washing machines, when it’s cheapest. Lower bills, less demand on the grid.

Sort our current tariffs out first

But hang on. I’m already confused about energy tariffs – and so are many others, according to Ofgem. Their research shows that 70% of people find the number of energy tariffs available confusing, and more than 50% find it too difficult to work out whether they would make any saving if they switched supplier. And when you consider that the average household has 89 different tariffs available to choose from, this is hardly surprising.

‘Before we see a proliferation of these time-of-use tariffs, we need to sort out the tariff confusion that exists already – we’d like to see Ofgem introducing minimum standards for tariffs,’ says Fiona Cochrane, Energy Policy Team Leader here at Which?

But that’s not all, she says, adding that we won’t all necessarily save under this scheme. ‘Time-of-use tariffs could be beneficial for those who can shift when and how they use their energy,’ she explains. ‘But there are a lot of households that won’t be able to do this, and we don’t want to see them penalised because of this.’

This is a good point, and one that probably applies to me, being a full-time worker who can’t pick and choose when to use energy. Should I have to pay more because I’m not around at the ‘cheapest’ times or is there a fairer way? Ideas like remotely switching off appliances will help keep costs down, but there needs to be more of these ideas for time-of-use tariffs to be worthwhile on a wider scale.


Well it sounds like an idea dreamt up by a committee. A far simpler, more flexible and proven method would be to charge a higher rate for every unit of energy used above a pre-determined amount. No need for complicated “smart meters” or having your washing machine switched off in the middle of a cycle (which might waste more energy than it saves if it has to warm up again), it’s the way the Dutch consumption tax works.

The pre-determined amount is established from the size and type of the property of course.


Surely we already have a “peak time tariff”? It’s what we all pay all day every day unless we have an Economy 7 meter and it’s based on the “peak” load being during working hours when shops, offices, and (when we had any) industry are all consuming power?

After all, that was the whole point of “Economy 7” or, to give it it’s full official title “OFF PEAK electricity”.

Supposedly electricity used between midnight and 7:00 a.m. was “off peak” because so few commercial users were operating in those hours.

But that was all set up back in the days before 24/7 living, round the clock shops and the like, so our lifestyles have rendered the system somewhat out of date.

I have no objection to day and night tariffs at all, but I do think that introducing anything extra will cause confusion and hardship. It may also be a health and safety issue: we are always being told now that appliances such as washers should NOT be left on unattended or at night time in case they malfunction: if we introduce even more tariffs that are specific to times of day people will be more likely to take risk and there will be more house fires, floods, etc.

Personally I would say that what we need is not a greater number of tariffs but an honest pricing policy by the energy companies and appliances that really do save energy, not an energy rating scheme that cons us into using more (see the convo’s on energy labels, energy saving appliances and so on for info on this).


Wonderful – I’m an OAP – to save energy I wear two sweaters and a blanket – temperature set to around 60 F. But I need some heating to remain alive – Hypothermia kills a lot of the elderly. How about enough money for the OAP to live on? – or are they saving energy to reduce the elderly population? My state pension is insufficient already that’s why we have winter fuel allowance – Though with this Government – I have a feeling it will be dropped.

Mark says:
2 March 2011

Rest assured the government has no plans to stop your winter fuel allowance. Even wealthy pensioners who spend the winter abroad will get that. However I am due to lose all my child benefit soon and I am not rich.

I’m not too keen on electricity companies being able to shut off appliances remotely. For a start it would be expensive to install and what would stop them shutting off my freezer just after I have loaded it up or after a long power cut? In those cases food could go off as a result.


Hate to point out they have already lowered the Winter Fuel Allowance from £250 to £200 – so far no Condem “promise” has proved to be not worth the breath used to lie about it. –

So I doubt if this “government” will stop lowering it until the numbers of OAPs dying from hypothermia related deaths reach epidemic proportions

Harry Felgate says:
25 December 2012

Richard, I don’t know you or your circumstances but I am a pensioner too. At the age of 20 I started paying into a pension scheme. This left me with less to spend at the time but I carried on paying into the pension scheme even when the extra money would have been handy. I made sure I was never going to be an OAP.


Might I suggest you go to your Citizens advice centre they can help ensure you are getting all your entitlements I do not have a large income but I do check out all I am entitled to also look for help with insulation I did and my energy bill has dropped by more than half you do not have to double wrap yourself ask your energy supplier for one of their energy team to come and advise it’s free and very helpful, don’t be too independent there is help available.


From an environmental point of view allowing suppliers to reduce peaks in demand by remote switching-off of water heaters or freezers makes sense as it reduces the need to have generators idling just to cope with short lived surges in demand.

Not keen on peak time tariffs but if smart meters allow easy implementation of off-peak cheaper rates to again level out demand – why not. Many people could use the delay program on their dishwasher, tumble-dryer or washing machine to benefit from the cheaper rates.


I agree that remote switching off is a good idea in theory, but I hope it’s communicated properly or I don’t think enough people will buy in to it. And as it has to be opt-in, it will need enough participants to work and have any effect environmentally.

Dan James says:
15 December 2010

Why not make the greedy shareholders stump up for an upgrade of all the infrastructure that they had from us for a pittance.The energy companies have run it all into the ground and paid out huge profits– little if any has been plowed back in, so now its blackmail time–they go to the government ie US and say we need money to upgrade or the whole system will not cope.Well after milking us and the government and the system for many greedy record profit years I say RE-NATIONALISE it, neither energy nor water the nescesities for living should be in the hands of greedy shareholders.



This is a superb concise summary of how we got into this mess and it is all too rarely said, least of all in the places it most needs to be heard.


Don’t forget a lot of the shareholders are some of our greedy politicians and their friends and relations. There are a lot of the biggest shareholders being foreign governments to help pay for their nationalised utilities.

Greystoker says:
16 December 2010

The energy companies would like to impose fluid tariffs on the consumer for the purpose of shareholder value and in order to invest in new plant.It has to been estimated that the electricity supply industry will require £200 billion in the next 10 years.The point has been reached after taking out huge profits from energy consumers since privatisation,a succession of owners,the majority foreign and not quoted on the UK financial market have reached the time when the generating and transmission system requires updating.The electricity supply industry was valued at £37 billion but was sold off for £7 billion and attracted investors like bees round a honeypot.Further, successive governments have allowed generating companies to become vertically integrated companies,ie generating thir own energy and supplying their own industrial and domestic consumers.Consequently there is no competition at the wholesale level which must have an adverse effect on industrial and domestic pricing.Ofgem are reported now to be looking at energy pricing but no doubt it will return a report, “all is well”

By 2016, fossil fired plant will be subject to the full rigour of the Large Combustion Plant Directive which will force a reduced operating regime and ultimately the decommissioning of such plant if the generating plant has not been retro fitted with FGD (Flu Gas Desulphurisation).

Coupled with this there are a number of alliances who hope to install a new raft of nuclear reactors which the government hopes will dovetail into the decomissioning of the present fossil fired plant (non FGD and FGD) and represent a climate change ************** main contenders are the EDF/Centrica who hope to commission four 1600mw European Advanced Reactors, a pair at Sizewell in Suffolk and a pair at Hinkley Point in Somerset.EDF for their part,have made some representation for financial support from HM Government while to take 25% of the venture,Centrica have had to fund £2.5 billion in order to buy 20% of the alliance and will have to service this debt.EDF,a French state enterprise,15% under private enterprise have recently had to put their distribution networks up for sale to balance the books.Needless to say,it the former CEGB nuclear organisation had been left in state control then,there would have been already further PWR units such as that at Sizewell B commissioned.

Huhne supports nuclear generation provided that no public money is involved which is an echo of the principle of privatisation in 1990 when it was declared that investment in new plant would depend on the free market.There would be no obligation on generating companies to generate and supply energy if the market conditions were not favourable.Financial returns would decide if newcomers and plant would enter the market.If returns were poor then new plant would not be installed.

Unfortunately nuclear projects cost money and the time lag for the project to be completed and the plant to enter commercial operation can be as long as long as 7 years.The envisaged EDF nuclear plant in the UK will be based on the new plant being projected at Flammenville,Cherbourg and this is at least a year behind time.

Nuclear plants form the base load generating into the electricity grid system.They are not flexible insofar that they cannot be two shifted,ie shutdown and brought back on load after a short shutdown,be it overnight or other low load demand periods.Consequently,off peak load will be essential to maximise the use and enhance the financial returns on nuclear plant investment.The French having a nuclear plant component of 85% must manage this effectively but it requires attractive prices for the consumer to participate.

This raises the question of UK off peak tariffs which in reality penalises the consumer in that the Economy 7 period may be at a cheaper level but the other 14 hours of electricity consumption where the bulk of electricity units are consumed are charged at a higher rate than a consumer who is not on a Economy 7 tariff.So much for the consumer providing load to keep generators operating efficiently and hence cheap during the night “trough”

Regarding the centralised control over the domestic consumer.This is a hair brained idea.It would require dedicated circuits in domestic premises to be installed together with the control systems in place.Industrial consumers would be rewarded with attractive tariffs where this is neccessary but the bargaining power of the domestic consumer in these circumstances would count for little.

It must be confusing for the average consumer to understand tariffs which appear initially to be attractive but then are replaced by other attractive tarrifs in a loss leader fashion.All are revenue raising exercises designed to increase shareholder value.There does not appear to be financial direction in place in these companies to service the renewal of plant and systems.Its probably a case that these companies do not have long term plans to stay,they can sell out at any time after making a quick profit.