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Do you have any plans to launch an agile TOU tariff?

  • 18 September 2018
  • 6 replies
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Will you be launching an agile tariff similar to the Octopus one - https://octopus.energy/agile/
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Best answer by Transparent 19 September 2018, 10:29

I'm really pleased to see this question raised on the Forum @barneyd.

As I'm not an OVO employee, I can't respond on behalf of the company. However, it's a subject I've been investigating for the past eight months, and I can give you some fairly strong indications of what will happen.

The entire Energy Supply Market for the UK is shifting to half-hour (HH) variable tariffs!

No longer will consumers visit Comparison websites and lock themselves into 1 or 2-year contracts at set price-points.

This strategy is called Demand Side Response (DSR) and is already enshrined in the regulations issued by Ofgem. There is an excellent PDF of a PowerPoint Presentation by two officials in Dept Energy & Climate Change (DECC) which is worthwhile downloading.

The first step in implementing DSR is to install a user-base of SMETS2 Smart Meters. Those with existing SMETS1 meters will have the software upgraded. OVO have announced that they have the capability to do this remotely, probably in about 12-months time.

The next step is to install In-Home Devices (IHDs) and Smartphone Apps which allow the users to set up their default parameters. So, for example, you might wish to charge an Electric Vehicle when the price per kWh falls below a threshold.

Thirdly, people will start to buy Auxilliary Load Control Switches or devices with ALCS units inbuilt. A Smart Washing Machine can then be pre-loaded, but only started once the conditions you have configured on your IHD are satisfied. The Washing Machine gets activated from a wireless (Zigbee) signal transmitted to it from your electricity Smart meter.

What Octopus are offering is a small foretaste of what is to come.
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Userlevel 7
Badge +3
I'm really pleased to see this question raised on the Forum @barneyd.

As I'm not an OVO employee, I can't respond on behalf of the company. However, it's a subject I've been investigating for the past eight months, and I can give you some fairly strong indications of what will happen.

The entire Energy Supply Market for the UK is shifting to half-hour (HH) variable tariffs!

No longer will consumers visit Comparison websites and lock themselves into 1 or 2-year contracts at set price-points.

This strategy is called Demand Side Response (DSR) and is already enshrined in the regulations issued by Ofgem. There is an excellent PDF of a PowerPoint Presentation by two officials in Dept Energy & Climate Change (DECC) which is worthwhile downloading.

The first step in implementing DSR is to install a user-base of SMETS2 Smart Meters. Those with existing SMETS1 meters will have the software upgraded. OVO have announced that they have the capability to do this remotely, probably in about 12-months time.

The next step is to install In-Home Devices (IHDs) and Smartphone Apps which allow the users to set up their default parameters. So, for example, you might wish to charge an Electric Vehicle when the price per kWh falls below a threshold.

Thirdly, people will start to buy Auxilliary Load Control Switches or devices with ALCS units inbuilt. A Smart Washing Machine can then be pre-loaded, but only started once the conditions you have configured on your IHD are satisfied. The Washing Machine gets activated from a wireless (Zigbee) signal transmitted to it from your electricity Smart meter.

What Octopus are offering is a small foretaste of what is to come.
Userlevel 4

Any update on this yet? My friend was just posting his meter rates from Octopus Agile where they were paying him to use energy at certain times.

Tony

 

Userlevel 7
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Ah… I’m glad you brought this up again @tony1tf .

About 2 months ago I sent @Tim_OVO a “wish-list” of Topics I’d like to see on an agenda for a Forum Members Visitors’ Day this year. Time Of Use tariff was one of the subjects I requested.

I wasn’t just wanting for OVO to tell us what they were doing, but also to feed back to their Management what features would be useful/attractive to us as customers.

Although the Covid-19 pandemic has obviously intervened to curtail plans for such a meeting being held in Bristol, I believe that Tim has still been finding out what OVO’s strategy is, and whose responsibility it is to move the company towards Demand Side Response.

Let’s hope he picks this up tomorrow and can tell us a bit more.

We may yet be able to arrange a Forum-based “Briefing” on the subject, or even group some of us into a one-off video-conference if needs be. It all rather depends on how OVO themselves feel about sharing ideas beyond their own internal strategy meetings. There’s obviously a lot of stuff which is company-confidential.

Userlevel 7
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I have definitely seen Octopus rates shown on twitter a lot recently. They are very attractive, especially for EV drivers. 👍

Userlevel 7
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I agree @ITGeek123 - but it’s easy to get lots of Tweets if you’re currently the only Supplier offering a Time Of Use tariff!

I think there are many aspects to building such a tariff. And potential customers will make decisions on which half-hour slots they use for differing reasons.

For example, OVO probably has a high percentage of customers who might opt for slots where there is a higher proportion of renewables in the energy mix. Price alone is not the deciding factor.

The UK’s DNOs have put together a basic TOU structure referred to as DCP268, which is based on the wholesale market. However, this only offers three different price-bands within the 24-hour period, labelled red, amber and green.

That strategy may be easily understood if offered to customers, but doesn’t have the granularity which Octopus currently offer. There are pros and cons to this approach.

That was why I requested a discussion with relevant OVO Managers before a tariff actually got launched. I think any proposed TOU tariff would benefit from being tested by a “consumer panel” first.

Userlevel 7
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Yep thanks for showing an interest @tony1tf and for the info @Transparent - as mentioned above I am in the process of finding and defining our strategy on TOU tariffs. This topic will be the perfect place to share the latest when I have it. 

 

If we can get some detail, I like the sound of a video call to discuss implications. Or have it as a talking point for the next VIP visit. One thing to be clear is that during this difficult timed globally, our focus is on helping our customers and members who need our support. Please see the COVID FAQ here. 

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