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When are you going to offer a smart tariff with 30 minute pricing to integrate with EV charge solutions?

  • 1 April 2019
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When are you going to offer a smart tariff with 30 minute pricing to integrate with ev charge solutions?
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Best answer by Transparent 2 April 2019, 12:39

Hi @Timbob1961

I think we all wish we knew the answer to that!

For the sake of others who come across this Topic, may I just explain your question using the standard terminology?

The strategy being pursued by HM Government (Dept of Energy and Climate Change) from 2013 onwards is to move us to a domestic electricity purchase scheme called Demand Side Response. The necessary legislation has been enacted through Parliament and the regulatory structure put in place by Ofgem, the industry regulator. You can read about this flexible tariff approach here on Ofgem's website.

Commercial electricity purchase by UK Energy Suppliers (like OVO) already happens in half-hour chunks. This is a skilled job, made more difficult by the fact that 50% of us customers buy our electricity on annual contracts... most of those having fixed price guarantees. If the wholesale costs rise unexpectedly, Energy Suppliers can find themselves running at a loss.

Moving customers to a variable half-hour tariff has major advantages. It can not only reduce the trading risks for the Suppliers, but also reduce the demand-peaks which mean we have to retain power stations on stand-by. Dealing with these factors will reduce costs overall and enable the country to better live within its energy budget and meet our obligations for CO2 emissions.

Domestic electricity requirements peak in early evening, bringing the country's Transmission Grid close to maximum capacity:


The graph above shows the current loading over the past 5 days on a sub-station transformer sited at a housing estate near me. The early evening peaks are clearly visible. The lower readings on Phase L3 are due to local solar generation, which connected to that phase to a greater extent than the other two.

Demand Side Response is too often referred to as a Time-Of-Use tariff (TOU). This isn't necessarily true. Economy-7 is actually an example of TOU in that it gives consumers a lower rate between midnight and 7am.

SMETS1 and SMETS2 Smart Meters have several possible TOU tariff slots inbuilt within the software. My new SMETS2 electricity meter has three which can be programmed remotely by OVO to different times of day. But that's not the same as the half-hour DSR which DECC and Ofgem are moving us towards.

Charging EVs overnight on Economy-7 tariff avoids the early-evening peak, but still requires that electricity to travel across the Transmission Grid.

Looking at the above graph, it would have made sense to have also offered a cheaper rate to charge EVs in the middle of the day over the weekend. This would've utilised local solar generation which had never needed to pass along the National Transmission Grid in the first place.

However, the main financial beneficiary of reducing the grid loading would be Western Power Distribution, the DNO who operate the Grid in which the above sub-station lies. The Domestic price regime they currently operate has a fixed-rate per kWh which OVO must pay them regardless of the time or extent of use of the Grid.

This obviously needs to change. Until DNOs are also required to implement variable pricing, the room for OVO to alter consumer tariff structures is limited.

That's why Ofgem are currently open for consultation on RIIO-ED2, which is the profits-constraint mechanism to be applied to Electricity Distribution Phase2 (ED2).

If you want to check the current Network Charges, have a look at this page on Western Power's website, and this spreadsheet for the South West area (dated 01apr19) in particular.

Let me stop at that point, and give @Timbob1961 an opportunity to respond. It would also help if you could complete your Forum Profile page, because then I could provide answers relevant to your geographical area rather than where I live! Thanks.

I'm hopeful that we might hear too from @Hari_OVO and @Cassie_OVO - both of whom have previously posted on the Forum about TOU Tariffs. See what Hari wrote here about EV charging price variations a couple of months back.
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Hi @Timbob1961

I think we all wish we knew the answer to that!

For the sake of others who come across this Topic, may I just explain your question using the standard terminology?

The strategy being pursued by HM Government (Dept of Energy and Climate Change) from 2013 onwards is to move us to a domestic electricity purchase scheme called Demand Side Response. The necessary legislation has been enacted through Parliament and the regulatory structure put in place by Ofgem, the industry regulator. You can read about this flexible tariff approach here on Ofgem's website.

Commercial electricity purchase by UK Energy Suppliers (like OVO) already happens in half-hour chunks. This is a skilled job, made more difficult by the fact that 50% of us customers buy our electricity on annual contracts... most of those having fixed price guarantees. If the wholesale costs rise unexpectedly, Energy Suppliers can find themselves running at a loss.

Moving customers to a variable half-hour tariff has major advantages. It can not only reduce the trading risks for the Suppliers, but also reduce the demand-peaks which mean we have to retain power stations on stand-by. Dealing with these factors will reduce costs overall and enable the country to better live within its energy budget and meet our obligations for CO2 emissions.

Domestic electricity requirements peak in early evening, bringing the country's Transmission Grid close to maximum capacity:


The graph above shows the current loading over the past 5 days on a sub-station transformer sited at a housing estate near me. The early evening peaks are clearly visible. The lower readings on Phase L3 are due to local solar generation, which connected to that phase to a greater extent than the other two.

Demand Side Response is too often referred to as a Time-Of-Use tariff (TOU). This isn't necessarily true. Economy-7 is actually an example of TOU in that it gives consumers a lower rate between midnight and 7am.

SMETS1 and SMETS2 Smart Meters have several possible TOU tariff slots inbuilt within the software. My new SMETS2 electricity meter has three which can be programmed remotely by OVO to different times of day. But that's not the same as the half-hour DSR which DECC and Ofgem are moving us towards.

Charging EVs overnight on Economy-7 tariff avoids the early-evening peak, but still requires that electricity to travel across the Transmission Grid.

Looking at the above graph, it would have made sense to have also offered a cheaper rate to charge EVs in the middle of the day over the weekend. This would've utilised local solar generation which had never needed to pass along the National Transmission Grid in the first place.

However, the main financial beneficiary of reducing the grid loading would be Western Power Distribution, the DNO who operate the Grid in which the above sub-station lies. The Domestic price regime they currently operate has a fixed-rate per kWh which OVO must pay them regardless of the time or extent of use of the Grid.

This obviously needs to change. Until DNOs are also required to implement variable pricing, the room for OVO to alter consumer tariff structures is limited.

That's why Ofgem are currently open for consultation on RIIO-ED2, which is the profits-constraint mechanism to be applied to Electricity Distribution Phase2 (ED2).

If you want to check the current Network Charges, have a look at this page on Western Power's website, and this spreadsheet for the South West area (dated 01apr19) in particular.

Let me stop at that point, and give @Timbob1961 an opportunity to respond. It would also help if you could complete your Forum Profile page, because then I could provide answers relevant to your geographical area rather than where I live! Thanks.

I'm hopeful that we might hear too from @Hari_OVO and @Cassie_OVO - both of whom have previously posted on the Forum about TOU Tariffs. See what Hari wrote here about EV charging price variations a couple of months back.

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