On a 1 Year Fixed rate Economy 10 - will I get 10 hours at a cheaper rate?

Hey ​@Collkitto 

I’m glad to see PeterE has already stopped by with some really helpful advice here on this one, I hope it’s helped answer your question.

We do have a handy topic about all things complex metering, including Economy 10 which might be helpful here:

Do let us know if you have any other questions.

You rang, sir?

I’ve asked all the AI deep search machines at my disposal to find an authoritative source for the statement that Economy 7 is ending by 2030. This was the short answer by one of them, which in fact echoed the others:

 
We also hear occasionally that Ofgem requires suppliers to offer Economy 7 or similar tariffs. Again, me and my little helpers can find no evidence for this urban legend.
 

[Waiting patiently to be proved wrong] 

I've see it stated on a couple of such “consultancy” websites, as well as on Linkedin.

It appears to be something that Ed Milliband said in a dinner speech somewhere, he does a lot of after dinner speaking. For Ed there is such a thing as a free lunch/dinner, and plenty of them.

(It could explain why only “consultants” who might have been at that dinner seem to know about it).

​@Firedog looking at my AI and asking more detailed questions I wholeheartedly agree with what you have said in that Ofgem have no plans to remove E7 (and/or E10 - as that was the the original question). So I think for legacy users you appear to be standing on solid ground with the following exception. As far as I know there is no reason why there cannot be a further erosion between the day and night rate. If the two rates were to ultimately converge on an ‘average’ value then, in theory, the E7 tariff just becomes nominal (in name only).

Another point is that, given the changes in the way renewables are being incorporated into the generation stack, other ToU tariffs could be introduced to give better value in terms of trading flexibility and cost which would effectively relegate E7 to a ‘basic’ tariff. There appears to be no obligation on suppliers to do anything other than support existing tariffs. I.e. they don't need to supply E7 or E10 where it doesn't exist as a tariff at an address already.

So as a summary, if you have E7 or E10 you can continue to have that and the 2030 comment I made earlier turns out to be a fiction (thanks Noel) but whether it will be the best tariff to stay on as ToU tariffs proliferate remains to be seen. It could be that the erosion of the E7 and E10 rate differentials (would Ofgem stop them converging?) would get customers to move to another ToU. I think suppliers would have to offer something broadly equivalent in cost.

For the full response from Chat (personalised for me) then click the link below.

https://chatgpt.com/share/6a2bc462-54c8-83eb-b421-a2e43411ad6e

Peter 

Thanks, ​@Peter E. That was an interesting read. This is a wide-ranging topic, so I find it a bit sad that all our AI friends seem to concentrate on the RTS connection (or lack of!).

Ofgem only get involved in regulating E7, not any of the other register-based ToU offerings like E10. This is presumably because the system has been around for a long time and there are still many customers relying on it. 

The furthest Ofgem go is to insist that E7 should be no more expensive than the SVT for a customer who consumes at least 42% of the total during offpeak hours. This extract is from Ofgem’s latest revision of the Typical Domestic Consumption Values used to illustrate variations in the price cap:

Table 2: E7 Consumption split

For the past several years, OVO - and I suspect some other suppliers - have been much more generous than Ofgem mandate; in my own region, the current consumption split is 25%. It’s not just the arithmetic difference that counts, but the geometric one too.

That probably needs a bit of explanation for some. If you work through the tariff, you can establish the break-even consumption split: it’s
   (difference between peak rate and single rate)
   (difference between peak rate and offpeak rate)

This isn’t exact, because it ignores differences in Standing Charge. However, those are insignificant (of the order of £1 a year!)

I ran a comparison between OVO’s and EDF’s rates. I checked with both Direct Debit and ‘On demand’ rates, but the results are the same. I used the quoted prices from Our prices | OVO Energy and DM1903-STANDARD-VARIABLE-DEEMED-AND-WELCOME-APR26-RATES.pdf | EDF for my region. 

This was the outcome for Direct Debit rates:

This shows that the (geometric) ratio between peak and offpeak rates is much more important than the (arithmetic) difference between them. The figure of £1088 in both cases is simply the price-capped equivalent. It would be just the same for both tariffs if the ratio is less than the Ofgem-mandated 42%, but an EDF customer would pay a significant premium if the ratio were less than 32%.

What does this mean in practice? Anyone comparing E7 and single-rate tariffs should first check what their peak, offpeak and total usage is for a whole year - easily established by looking at meter readings from today and a year ago. Then it’s simple to work out the ‘consumption split’ offpeak/total. If it’s less than the calculated ratio for the tariff concerned, E7 is the better bet. 

This may be more meaningful for a customer contemplating a change in the usage pattern - installing a heat pump or an EV charger, say, or installing or removing storage heaters. Add the proposed changes to the meter-readings figures and work out the ratio again - it’s only simple arithmetic, after all. A low offpeak price may be deceptive, as the EDF result above shows ...