Originally published on Dave Toke’s Green Energy Blog.
We desperately need green NGOs and campaigners to campaign for time-of-day-electricity charging. Then we will get real smart meters, not the sham ones that are being installed now. The so-called smart meters, being rolled out in a house near you, are mainly a bit of meaningless hype which won’t do the very thing that popular mythology thinks they will do — which is to ensure that electricity prices are geared so that they fit in with when electricity is being generated.
The Government and OFGEM need to implement grid and distribution charges that would discourage electricity companies from supplying energy at peak times. Such charges would make it much more likely that the electricity industry would encourage their consumers, through their pricing policies, to consume less electricity during peak times.
As the green energy revolution gathers pace, and the number of electric cars increases, we ought to be making the system really smarter. This involves incentivizing consumers to charge their electric cars and perform other functions (wash clothes, etc.) at times when there is a surplus of generating capacity rather than when there is a shortage.
But practically none of the 53 million smart meters being rolled out across the country will do this. I have heard of one small supplier that offers tariffs according to time of day, but regrettably such efforts will be stymied by the failure of the electricity system to encourage this type of scheme.
In theory electricity suppliers will have an incentive to encourage their consumers to buy electricity at times when there is a surplus of electricity, and thus when it is cheapest on the wholesale electricity markets (i.e. power coming from power generators). Alas, the system does not do enough to encourage this. This is because if a brave electricity company (e.g. ‘Green Energy’) does introduce time-of-day pricing, it will help its competitors as well by reducing the general prices on the wholesale market. The other electricity companies will just act as freeloading parasites and the smart company will be sharing its gains with them.
One solution to this is for the Government to regulate the electricity distributors to ensure that they introduce substantial charges on suppliers for use of the system when there is peak demand for electricity. Thus all electricity suppliers will have a greater interest in introducing ‘time-of-day’ electricity charging schemes. Then we might see some real smart meters being installed that allow this. There are some small variable charges for using the system at the moment but they are paltry compared to what needs to be done to encourage a decentralized energy system that responds to consumers and clean energy needs rather than the needs of the big electricity companies.
Electricity distributors also need to be given more incentives to develop storage systems on their local electricity ‘feeder’ systems rather than increase distribution capacity through bigger transformers etc.
However this will not happen if the electricity industry is left to itself. The Government and OFGEM will shuffle a few reports and do nothing of any consequence. All the electricity industry will do, as witnessed by the current smart meter fiasco, is to channel slogans about how consumers can be greener into feather-bedding its own interests. In this case it doesn’t extend much further than saving costs on sending around somebody to read the electricity meter! Rather than put all their efforts into ensuring system flexibility, the network operators emphasize how we need more power lines to be built.
Organizations like FOE and 10:10 need to get to grips with the smart meter issue and start making demands. Otherwise we shall carry on hearing the same old stories about how we need dozens of gigawatts more of centralized power stations — rather than decentralized, variable renewable energy sources. The committees that decide policy are stuffed with with the representatives of the existing energy establishment. Slogans like decentralized energy and smart energy systems will remain meaningless marketing catchphrases used by the electricity industry merely to reproduce themselves as near as possible in their current form.
Please don’t let this happen!
Some useful references:
Reprinted with permission.