Time of Use (TOU) tariffs and how to compare your prices with other suppliers - discussion


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Time of use tariffs

 

These are tariffs/plans which have ‘dynamic’ pricing. The unit rates change at different times of the day, rising at peak demand, and falling during periods of low demand. Here’s more info on TOU tariffs. 

 

As TOU tariffs start to become available to UK energy consumers, I want to ensure we have a space (this topic) to debate and discuss how a customer is going to be able to compare prices between suppliers. 

 

How will consumers quickly and easily check whether they ‘could pay less’?


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As with all things related to comparisons,  apples are not all equal and comparing an apple with another apple requires a ton of relevant base facts beforehand.  Sadly indeed as the tariffs do indeed get smarter, so too does the act of comparison get harder, unless we can get all the usage data in a machine readable format (which i think we can as this could be required under a GDPR SAR) , but would also need a multivendor comparison tool (website) and all the data to be consistent and consistently structured between one another . Whilst this may seem tricky now, i work in the travel business and have seen airlines and ferry companies manage this so it is not beyond the realms of the future. That way, that little ofgem box can actually compare fairly  it just needs agreement and management.

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Interesting @Jequinlan 

I had to look this up.

GDPR SAR

A Subject Access Request (SAR) is the Right of Access allowing an individual to obtain records to their personal information, held by an organisation.

But we couldn't be each submitting individual requests and then waiting up to a month to get them and pass them on. Presumably it would be more a data portability agreement. Perhaps it would be an industry requirement that data be available to comparison sites if and when an individual authorised access?

If we are on time based charging, it will be gigabytes of data!

If we are on time based charging and our smart devices each choose the cheapest time to operate, those times would change depending on price and availability, so they wouldn't be comparable between providers that use mostly solar, mostly wind, mostly gas… or if my provider uses wind but I've solar panels, or if I've a battery wall or an EV. 

It sure makes your brain hurt. 

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Agree its not ideal, but yes at least there is a way of getting it. As indeed i was hinting there should be industry standardisation in this are, but sadly not yet. Data portability is indeed a valid point however, sadly the actual implications of what this actually means has not yes been settled in case law. We will get there though.

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I think this is becoming a useful discussion.

There’s nothing preventing us from devising a useful alternative to the current Tariff Comparison Box which would work for consumers on a Time Of Use tariff and then submitting it to BEIS or Ofgem.

Here on the Forum we have the breadth of skills to achieve this. Moreover we have a far greater proportion of consumers with experience of timed/controlled Grid import/export than either BEIS or Ofgem have amongst their staff! That puts us in a pre-eminent position to consider the variables.

Even if we can’t actually write the comparison algorithm, we could at least establish the rule-set on which it must be built.

That’s got to be a lot better than waiting for Sir Humphrey Appleby to put together an inter-departmental Committee of Inquiry which then gets its suggestions put out to Public Consultation… the results of which then get strangled by a Parliamentary sub-committee who don’t understand what the issue is in the first place :scream:

So let me kick this off with a few pointers:

1: Let’s not assume that Comparison Websites are going to survive as we currently know them.

2: We need Ofgem to impose a date by which all Energy Suppliers must offer at least one Time Of Use tariff. This can be in addition to the maximum 3 (or is it 4?) which they may offer at present.

3: The contents of the Tariff Comparison Box must still be understandable by those who don’t have much idea of the difference between a Fixed-term Tariff and a Variable Tariff. (Remember that we already have Variable Tariffs; these are automatically applied to those who don’t switch at the end of their Fixed-Contract).

4: There are two concepts which form the basis of a Time Of Use tariff:

  1. A set of preferences which a consumer sets up as their daily norm.
  2. A variation on that preference-set invoked because of a one-off Notification. This might be “Cost per kWh lowered to 5p between 10:30 - 15:00 tomorrow. Do you wish to alter preferences for tomorrow? Y/N

There. That should be enough to get us going.

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I’m just going to tag a few more here. They may not respond immediately, but because of other stuff they’ve posted here, they’d probably like to know this Topic exists.

@ITGeek123  @D10hul@sylm_2000 and @PeterR1947 

@BarryE  who raised a legitimate issue here about the Tariff Comparison Box just a month ago.

@JimTraynor@SteveRB  and @Rishi the Fox who got stuck into the maths behind the V2G export credits on this topic a year ago. And @Hari_OVO - although he’s only concerned with the export credit payments, which operate outside of the Billing System.

Is there anyone obvious I’ve missed out @Tim_OVO ?

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Thanks @Transparent i do think if we can get some lega on this and especially if anyone from OVO has contacts in other suppliers to see if they have any plans in this area too it is a great initiative and perhaps OVO can take the lead (and us, the Community can help!) I am happy to create the common data structure design (as that’s my job as a data architect) if and when we understand what variables and data need to go into the equation! 

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Yes, @Jequinlan - I imagined that you might be able to collate thoughts into a data structure. :slight_smile:

I don’t think OVO themselves will get involved in this Discussion Topic. Whilst I’m sure they have staff whose job it is to analyse what other Energy Suppliers are up to, they’re hardly going to divulge anything on an Open Forum. Nor are they going to be openly critical of the guidelines which their regulator, Ofgem, impose upon them!

I think we’re better discussing this amongst ourselves. They key points are:

  1. We are reasonably astute about energy matters, and yet we still struggle to understand what the Tariff Comparison Box is trying to tell us!
  2. We have experience of Devices controlled by the Kaluza Platform, and hence are aware of how very difficult it is to include these variable Imports/Exports within any sort of Comparison.

As we are representative of the very sort of customers who Ofgem are trying to “inform” via the Tariff Comparison Box we actually hold quite a strong position. We are, after all, trying to add constructive input to a discussion which Ofgem will have to resolve very soon.

 

Something else I’ve just thought of.

I suspect all us active Forum Members are on Fixed Contracts. I’ve never seen an OVO invoice for their Variable Tariff, so I have no idea if the cost is calculated daily or monthly, nor whether the Tariff Comparison Box looks the same.

@Tim_OVOis it possible for you to obtain a “dummy” Variable Tariff invoice for us from the Billing Dept.?

For the moment let’s assume that we’re only considering a Variable Tariff customer with a Smart Meter. So OVO are receiving the usage data for each day.

 

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Ok @Transparent let us assume simple case 1st, what we need to understand 1st is what data influences cost:

Essentially I believe this to be a combination of:

Variable amounts:

Amount of flow of electricity and Gas (in or out for elec) 

Method of power generated (where its applicable)

Date and Time it occurs (therefore rate that applies)

Tarrif (plan) which applies

Type of meter (as I guess E7 and E10 may influence this calculation further due to having to have 2 meter reading values i believe)

Plus

 

Fixed "costs":

Such as daily standing charges

Termination fees

Discounts for any reasons such as DD or submitting meter reads.

Other bonuses (such as free polar membership) eqivalent values.

 

I am happy to (if they are happy to provide) use my own account as an example as I think there is a large amount of these variables that apply (if we cannot get a mock produced)

 

Out of interest, how do we get to influence ofgem?

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The problem I see, and it has already happened to me, is that the more complex tariffs become, the harder it is for the data to be compared.

I’m on the Octopus Go tariff which gives me Elect at 5p per kWh between 00:30 and 04:30 every night but that immediately mean that I cannot do comparisons using uswitch or any of the other comparison sites as the tariff doesn’t appear on any of them so I have to revert to my trusty spreadsheet

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@PeterR1947 this is exactly why @Transparent and I have been discussing what data we technically need for a comparison! We havd the problem, and now need to agree the components that feed into a visble solution 

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Great thoughts. Interesting discussion. Is the best name “Variable Tariff” or “Time-of-Use Tariff”? The latter feels more appropriate but I’ve seen both in different places. Variable implies the standard tariff that you revert to at end of contract.

I struggle to understand how such Tariffs can be compared between suppliers, perhaps because I have never seen one in use.  I understand the principle, but as to the practical day-to-day application, I’m in the dark.  The answer in this thread by @Transparent is very helpful, but the slideshow linked is full of acronyms that take a while to get your head around.  Most of Ofgem’s reports and forums seem to stop in 2013!  Citizens Advice also has a useful assessment of the benefits and pitfalls of a Time-of-Use tariff rollout which as a newbie I found useful.

I’ve got economy seven, and other than putting washers on at night, there isn’t much I can do to adjust my consumption to match.  If a Variable aka Time-of-Use tariff gives next day prices for each half hour at 4pm the previous day, that is not something for which I can easily amend usage manually. Half an hour is too short to clothes or dish wash. It seems that to use a Variable Tariff effectively, I would need to invest in smart devices - and with an annual bill of £1200 of which only £360 is electric, that would be a LONG payback period. Roll on air source heat pumps, better home battery storage and better insulated fridges and freezers so that they can be powered down in peak cost times.

I cannot imagine the vast majority of consumers being able to comprehend such tariffs, nor switching supplier with them. If the rates are set each DAY by each supplier for the next day, how can you compare one to another, except on historical data? Will suppliers have to define a % by which they will be above or below a centrally set half-hourly rate?

I recall a few years ago there was outcry on the forum from people who had moved to OVO in autumn for a cheaper tariff, and were upset because their Direct Debits were increased shortly after joining. They could not understand that MUCH colder weather than the previous year meant more heating, so more units used, and even at a cheaper rate per unit, higher monthly cost and Direct Debit.

That is before you get me on to the fact that most retail and many commercial customers don’t understand the difference between a Direct Debit and a Standing Order.

The rest is perhaps off the immediate topic, but it all links to how we use the available energy effectively.

The people I can see losing out substantially are the ones most at risk. Older and/or less well off without access to or ability to use smart devices.  People with children who HAVE to cook when the kids come home, wash clothes daily and use the tumble drier because they do not have that many changes of clothes available. People living in old uninsulated houses who lose heat the moment they turn the heating off. The ones who gain will be the ones who can afford to live in a new insulated house, or retrofit an older one, replace gas boilers with heat pumps, install batteries or buy electric cars. The issue seems far far bigger than mere Time-of-Use charging.

As examples: My older friends have smart meters only because it means they do not need to give monthly readings. They don’t look at their IHD or change their use, and get upset if I suggest they should. They won’t consider loft insulation because they put an inch in when that was the rule.  Younger relatives with children at home live in rented accommodation, which is old and unimproved. None of them would get any benefit or be able to adjust how they use.

Should the comparisons that we all get in our bills where it shows how much more or less than average be used to trigger a review of potential energy savings? Is that something a supplier could or should offer,  grant-supported by a scheme less cheatable than the warm home one was?

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It looks as if the Australian government already has a comparison mechanism - including solar panels.

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Further research: The UK government already has a project to develop a comparison tool, so they might already be doing what you are thinking of doing.

 

I couldn’t find it on their site by searching, but this recent article on the Carbon Trust web site looked promising

Carbon Trust experts part of new UK government-funded consortium to develop smart tariff comparison tool for consumers

07 July 2020 NEWS

The Smarter Tariff - Smarter Comparison project aims to develop a comparison tool prototype that gives consumers an easy way to compare smart tariffs such as time-of-use, export and electric vehicle tariffs. 

 

It is a contract for research awarded to Vital Energi, and seems to be a very closed group, not involving consumers other than through davies+mckerr (consumer research).

Wow, for davies+mckerr the first phase of the project consisted of 24 qualitative online interviews with energy consumers.  A whole 24!

Vital Energi’s post linked above says that they will be launching a new web site for the project.  Perhaps that is how you can get involved. 

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Here’s the topic we’ve made, @EverythingNeedsAUserName 

 

FYI to anyone reading this, we created this discussion topic from another ongoing discussion here about the ‘Could you pay less’ feature of your statements / summaries. 

 

There’s also another topic related to TOU tariffs here, from @ArundaleP that is worth checking out for anyone interested in this. 

 

:robot:

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I am aware of the government project and the ongoing research and interviews (I took part). 
It will be interesting to see the path this goes down. Reading between the lines, the impression I got was there are talks of using your real historic smart meter data to allow comparison between suppliers. 
 

I haven’t heard anything for a few months now but will let you know if there is anything interesting (as long as it’s not confidential of course).

The biggest problem I see is not everyone is on a smart meter or has real time of use consumption figures. Those that have it hopefully will allow us to compare tariffs for our particular consumption habits and maybe suggest a few tweaks to save money , CO2 etc.

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Keep us in the loop as much as you can @ArundaleP - your knowledge on the subject is much appreciated here!

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I’d like to suggest a mechanism which could solve this problem. As usual I’m going to resort to diagrams.  :slight_smile:

Let’s imagine that we are offered a Time Of Use tariff which permits two variables that may be set for any half-hour period of the day:

  • Energy mix
  • Price per kWh

Looking first at Energy Mix, I’m going to simplify the choices down to three broad categories:

  • fossil fuels; coal, oil & gas (excluding bio-methane)
  • renewables; hydro-electric, wind, solar, wave, anaerobic digestion etc
  • nuclear; fission, but possibly fusion in time to come

We can set these out at corners of a triangle, thus

Energy mix options

This enables a customer to define a preference by choosing a point within the triangle that best fits their preferences.

For existing OVO customers, that point must be somewhere along the line between Fossil and Renewable because Nuclear Energy isn’t available at all. By contrast, a customer on EDF’s Blue+ Tariff will be most of the way towards the lower-right corner because they achieve “low carbon” energy by mainly using nuclear.

Now let’s bring Price per kWh into the equation. I’m going to lay the triangle down and project price vertically on the 3rd axis:

Energy-mix with price data

A customer can define how much they are willing to pay in order to use their Energy Mix. This produces the Yellow Plane hovering above our original triangle. It effectively allows a bias such that the customer is moved further away from their Mix-preferences as the cost of doing so is more than they’re prepared to spend.

 

In order to compare Tariffs between different Energy Suppliers, we need the matrix which defines that Yellow Plane, combined with the total annual consumption figure which we already use.

 

Taking this one more step forward, the unit-price of our electricity is going to change according to the time of day. That’s the Time Of Use tariff which is the subject of this Topic.

Over the months we will continue to make choices about our electricity use. That effectively shifts the Yellow Plane as we respond to cheaper energy when the sun shines, or times when we might over-ride our normal preferences for a special event… perhaps the occasional need to charge our EV during a period of peak demand.

All of this is noted by the Billing System, which is therefore able to calculate the Standard Deviation for movements of our Yellow Plane throughout the year.

 

So our electricity Tariff Comparison Information now has three parameters:

  • Total Annual Consumption (as at present)
  • the Matrix defining the Mean position of our Yellow Plane
  • the Standard Deviation from that Mean over a given period of time

… all of which should provide us with enough data to compare between tariffs from rival Suppliers.

 

Discuss….. :thinking:

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Wow @Transparent that is some post. 

 

My thoughts are: 

1. For most customers, I suggest we simplify the mix options to become boolean for each type. This doesn't punish OVO (in fact it would help) but actually simplifies it for the consumer and makes it fair. This provides seven price points at any time, the 3 points, the 3 mid points between lines and the centre of your triangle. I think starting simple as this is probably a fair thing to do bth for suppliers and end users.

 

2. The acceptance then of "if you use an energy I didn't want to use it needs to be £x cheaper" is then relatively simple to implement as well (and I like this thinking)

3. Agree if we have the half hourly prices from billing, and the pricing table, along with fuel mix for each tarrif (which can obviously be displayed as the %split allowing people to pay a bit more to move along an axis in the triangle in a finer grain than the 7 points) we can then bring a fair comparison.  If we have a years worth of data (but ideally 3) then comparisons will smooth out exception events and demonstrate normal as special occasions happen every year.

 

I eagerly await your response!

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I don’t understand the strategy behind your first step @Jequinlan - why Boolean?

I’m trying to start from where we are at present. We already have the electricity Energy Mix data for each Bulk Supply Point (BSP) on the Distribution Grid.

 

So, for example,  here’s my energy mix for the last hour:

 

and here’s the energy-mix data for the entire day:

That enables a pretty accurate Time Of Use tariff to be built and then combined with my preferences. There’s nothing boolean about this data.

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@Transparent I think you may have missed what I was trying to say, perhaps it was my poor communication. 

 

Rather than specifying a suggested mix % as target, I was suggesting the default starting point should be if you were willing to accept or not fuel from each source or not (boolean)

 

I.e. my starting point may say "i am happy with renewables and nuclear but don't want to use fossil fuels. This would easily put me on the bottom middle on the triangle as a simple start point. 

 

If I said i was happy with fossil fuels and renewables but no nuclear,  then i am on the left side of the triangle. 3 simple boolean flags can generate a much simpler starting point sor users (7 points as no to all isn't an option) it was just an easier start than saying where on the triangle i want a tarrif 60% renewable , 17.33% nuclear and the rest fossil.. 

 

It would look something like 

Renewable energy : yes/no

Nuclear  energy: yes/no

Fossil fuel energy: yes/no

Amount i would have to save to use other fuels: £xx

 

 

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@Transparent @Jequinlan I applaud the detail you have both put in this but feel this is over complicated for consumers.

If you consider currently available TOU billing tariffs there is not the option to select the energy source mix. There are products that are 100% renewables and some that are not. 
 

What is variable between tariffs is the cost per kWh at half hourly intervals or for fixed periods of time throughout the day (which may or may not change depending on time of year).

For the purpose of consumers comparing different energy tariffs you need to know how much and when consumption occurs in your daily use. It is also worth considering if any of these are flexible (EV charging periods etc).

Another variable for the comparison is if you have or are looking at generating your own electricity and potentially storing it.

Even just comparing several currently available TOU tariffs (which there aren’t many but set to increase hopefully) is very complex and is dependent on having consumption data which for most people is not easily available, or is not easily presented in a format that is useful for calculating costs. 
 

The key to being able to compare TOU tariffs is having access to your own historical consumption data at suitable resolution to allow the number crunching to happen. Without it there are an awful lot of assumptions and generalisations that will need to apply (similar to current comparison sites using the size of your house and number of occupants).

With this, data comparison software can show your current tariff and compare with other available tariffs. The clever part would be to make suggestions based on shifting flexible consumption to other time periods.

The holy grail would be able to decide if cost or environmental impact is your priority or a combination of both with a choice of bias in either direction. 
 

It would also be useful to calculate predictions of changes in personal circumstances, eg start working from home, purchase an EV (or additional EV), upgrade or add solar or battery storage etc etc

These calculations could be helpful for people wishing to investigate the costs and payback periods for green home improvements or perhaps see the maximum environmental benefits for their budget. 

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@ArundaleP I think my thinking of the simplification in my last post was leaning to your comments but also valuing many people DO care about how electricity is produced. Indeed in all cases, access to the underlying billing data , plus then some indeed extrapolated “typical” life events that could be added to your actual usage would provide a great tool, but I do feel a simple indication of choice for energy sources also prompts the mind and drives the goal of zero carbon.

 

What I really want is an extract of data so I could see how easy it is to model as a comparison site.

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@ArundaleP wrote:

this is over complicated for consumers

True. I haven’t (yet) put forward a User Interface for this model. We’re still a couple of stages back from that.  All I’ve proposed so far is a mechanism by which comparisons can be made between Energy Suppliers offering different Tariffs, which may or may not be Time Of Use.

 

If you consider currently available TOU billing tariffs there is not the option to select the energy source mix

Also true. And I think that’s appalling!

Nothing in the current strategies for Time Of Use tariffs takes into account the enormous change of public perception on Climate Change. Nor do such Tariffs address the Government’s international obligations for CO2 emissions, or their targets to achieve net-Zero by 2050.

Given OVO’s new Plan-Zero initiative, it would be utter hypocrisy if they were to retain the “pricing only” approach which Kaluza are presently using to incentivise those on the V2G charger Trial.

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@Transparent I think it’s up to the suppliers what products they offer but hopefully they will acknowledge that consumers are increasingly desiring greener options and offer products to fit that demand.

As a consumer while there are options of cost vs green it is their right to choose.

I would like to see all tariffs zero carbon very soon and would happily pay more for that if that’s what is needed but not everybody can afford to pay more than they need to.  Ultimately we have a very short time frame (in terms of infrastructure investment periods) to change to net zero. At some point in the not so distant future, consumers will not be given a choice, all tariffs will be zero carbon.
 

I am on the V2G trial and don’t see the issue with the pricing only incentive you describe. It is a trial and an important research tool at that. To get people to sign up you can’t expect them to be out of pocket. It certainly doesn’t make you rich and would say until we had solar, it was costing us more than we could have paid through other suppliers (but I have just spent £6K on solar).

What V2G does do is lower the grid demand at peak times and consumes when it is best to do so, benefitting both the grid and the environment.


I would like to see more tariffs which incentivise consumption at times with the least environmental impact. Having Kaluza control V2G / V2H to minimise consumption at the worst times would be great and would save me money. 

I personally see V2G as part of a smart grid of the future as do many key people in the energy industry.


I believe companies like Kaluza will be key to enabling grid demand and generation management of consumer level devices in the future. Controlling a potential 40 million cars charging is pretty significant for the grid and that’s before you consider heat pumps and battery storage.


Time of use tariffs are a tool that can be used to shape the way consumers consume. Ultimately if there is more cost (environmental or financial) the consumer pays more. Generally people respond to that. 

 

 

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Thanks @ArundaleP - and I think we’re closer in our aims than might be supposed from the ‘active’ discussion above. You wrote:

As a consumer while there are options of cost vs green it is their right to choose.

We are agreed. However, on a fixed-price contract that is readily selected. On a variable Time Of Use tariff it will have to built into the preferences. That’s one of the points I’m making. Ofgem shouldn’t permit TOU tariffs where the customer is unaware of the energy-mix when making a decision based on price. The two concepts are linked.

You wrote:

I am on the V2G trial and don’t see the issue with the pricing only incentive you describe.

Did you view the online Podcast in Feb20 where Tom Pakenham and Conor Maher-McWilliams discussed the commercial view of the V2G charger Trial?

It became clear that the framework in which it operates is defined by the investment from HMG and Mitsubishi, who need to be assured that this is financially viable. Only then could it ramp up to create a product to be available more widely. It was very interesting to understand how the Kaluza Platform has been set up to buy & sell on the per-minute wholesale price of electricity. But it did reveal that price alone was the factor used in the control system behind this particular trial.

You wrote:

What V2G does do is lower the grid demand at peak times and consumes when it is best to do so, benefitting both the grid and the environment.

No. This isn’t what is happening (yet).

The current Trial monitors only the National Grid and the wholesale price.

Almost all renewable energy connects to the Distribution Grid. Moreover the regions where the bulk of this is produced are under capacity constraints whereby the renewable power cannot be fed back to the National Grid. In times of excess generation, the Distribution Network Operators notify producers to remove their generation from the Grid in order to stay within the 253v AC maximum permitted supply to end-users.

SW Region BSP & Primary transformers; red = generation capacity constraint

I would agree that the Kaluza Platform has the potential to enable greater uptake of renewable energy and thereby help the environment, but that’s a separate issue to the driving factors behind the current Trial.

In fact, during this Trial, Kaluza did have the opportunity to run a test with one Nissan Leaf whereby its charging cycle was subject to data-input from a monitored substation. However, it was a theoretical-test only because the substation was in North Cornwall where there’s lots of wind-turbine generation, and the car was in Wiltshire. (That OpenLV monitor has now been removed due to the expiry of its operating licence).

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