Examples of charging trials in the water industry 

https://www.ofwat.gov.uk/regulated-companies/company-obligations/ofwat-regulating-the-industry-compliance-requirements-charging/household-charging-trials/

Not sure who defines 'profligate', or how they do so, but won't this penalise people with ASHPs? In effect, a disincentive to install a heat pump, or even remove one.

@cathodeRay 

Er, not my choice of language - I would never use the word 'profligate' but large parts of Europe have tiered electricity pricing and Spain, which I offered as an example, has a high level of electric A2A heating/cooling and it has never been a problem. The only parts of Spain with 'wet heating' systems are the north and the Atlantic west - Galicia for example.

Electricity in many parts of Europe is cheaper than the UK and if the UK relocated some of the charges from electricity to gas ours 'should' be cheaper too. 

High use would possibly be big heat pumps in large houses but not Mr and Mrs Jo Average and anyway there are at least three tiers in Spain. I don't think tiered pricing is relevant to 'disincentivise' heat pumps - particularly if electricity is de-linked from gas. 

Our energy markets are broken - tiered pricing and de-linking electricity from gas would be a step in the right direction. 

One thing to keep in mind is that Britain and Portugal are the only two countries in Europe with privatised grids. [Yes, the government has brought a part of it back under government ownership but only a part]. 

Posted by: @lucia

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Our energy markets are broken

I agree. One thing I don't get is why electricity users get clobbered with all the extra charges, leaving gas as the much cheaper option, another disincentive to switch away from fossil fuels. Why not put the renewable costs and environmental levies etc on gas? Gas/electricity parity per kWh would go along way to persuade many people to fit heat pumps, and it could be argued that explicitly penalising people who chose to use a fossil fuel is actually a good thing, though personally I am not sure I agree with this - being a bit of a donkey, I generally prefer carrots to sticks.     

Posted by: @jeff

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The initial big jump was went OFGEM moved some existing not new infrastructure costs from the unit rate to the standing charge.

That may well be the message that was offered at the time.

However, the large rise in SC agreed by Ofgem was announced just after the DNOs had filed their Final (3rd) Submissions for their RIIO-ED2 revenue agreements (31st March'22), and just before the Significant Code Review of 3rd May'22. That SCR for Forward Looking Access Charges was when Ofgem decreased the amounts which DNOs could 'require as a contribution' from companies requesting grid-connections.

Ofgem themselves would've known that they intended issuing the SCR, whilst the DNOs did not.

The DNOs assumed (incorrectly) that the agreed rise was Ofgem preparing to ratify the DNO's RIIO-ED2 funding requirements.
There was widespread disbelieve when the SCR pulled the rug from beneath their feet.

There was a delay until Nov'22 when Ofgem did eventually issue the Decision Notice for the RIIO-ED2 conditions.

However, DNOs had been caught unawares. The additional funding required to support the strategies they'd committed to within RIIO-ED2 was now exceeded by the loss of revenue from contributions towards infrastructure upgrades by companies requiring connections.

I am quite certain this is the case. I was one of 60+ 'stakeholders' who attended a meeting hosted by NGED at Wadebridge, Cornwall, to discuss the funding shortfall.

NGED split us into groups in which we discussed 40 of the Service Commitments they had proposed within their RIIO-ED2 submission, and voted on which ones should have lower priority or be dropped altogether.

For legal reasons I'm not prepared to share some of details of those discussions on a public forum.

Posted by: @lucia

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High use would possibly be big heat pumps in large houses but not Mr and Mrs Jo Average and anyway there are at least three tiers in Spain. I don't think tiered pricing is relevant to 'disincentivise' heat pumps - particularly if electricity is de-linked from gas. 

The mechanism available to us in the UK is much better 'tuned' than the tiered system you describe.

The Block Tariff feature in Smart Meters can extend over a number of half-hour periods.
The total consumption across the Block Tariff Zone is calculated.
An additional charge per kWh is only applied to households which have exceeded a pre-announced threshold.

Here's what a Block Tariff looks like when superimposed on a notional ToU Tariff with four price-points:

A Block-Tariff doesn't increase costs for households with Heat Pumps because those have a steady consumption of electricity.

The people it would penalise are those where teenagers rush home from school, throw all their uniform in the wash, turn on TV and computers in bedrooms, whilst parents cook and recharge their EV to go out in the evening. It's a mechanism to reward those who are mindful of usage during the early evening peak.

Posted by: @lucia

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I'm located between the moors and the sea in the south.

Then we are not far apart.

I'm between the moors and the border posts on the River Tamar 😉 

I know the SHDC Officer who covers Climate Change issues... and he's about to receive an email from me.

Posted by: @lucia

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I'm really interested in all this and definitely would like to talk to you more about it. It's an area I'm beginning to work in bit-by-bit. 

Coffee? ☕ 

Posted by: @transparent

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Posted by: @jeff

↑

The initial big jump was went OFGEM moved some existing not new infrastructure costs from the unit rate to the standing charge.

That may well be the message that was offered at the time.

However, the large rise in SC agreed by Ofgem was announced just after the DNOs had filed their Final (3rd) Submissions for their RIIO-ED2 revenue agreements (31st March'22), and just before the Significant Code Review of 3rd May'22. That SCR for Forward Looking Access Charges was when Ofgem decreased the amounts which DNOs could 'require as a contribution' from companies requesting grid-connections.

Ofgem themselves would've known that they intended issuing the SCR, whilst the DNOs did not.

The DNOs assumed (incorrectly) that the agreed rise was Ofgem preparing to ratify the DNO's RIIO-ED2 funding requirements.
There was widespread disbelieve when the SCR pulled the rug from beneath their feet.

There was a delay until Nov'22 when Ofgem did eventually issue the Decision Notice for the RIIO-ED2 conditions.

However, DNOs had been caught unawares. The additional funding required to support the strategies they'd committed to within RIIO-ED2 was now exceeded by the loss of revenue from contributions towards infrastructure upgrades by companies requiring connections.

I am quite certain this is the case. I was one of 60+ 'stakeholders' who attended a meeting hosted by NGED at Wadebridge, Cornwall, to discuss the funding shortfall.

NGED split us into groups in which we discussed 40 of the Service Commitments they had proposed within their RIIO-ED2 submission, and voted on which ones should have lower priority or be dropped altogether.

For legal reasons I'm not prepared to share some of details of those discussions on a public forum.

Apologies for the rambling note...

I don't doubt you know more than me with your  confidential chats and things you won't discuss. I also don't doubt you are correct in everything you say about it. I am a mere bog standard customer who reads a few things and posts infrequently these days on the forum. I have a lot of respect for you knowledge and work.

This was a typical news story at the time and before that the change was talked about leading up to it.

https://www.theguardian.com/money/2024/mar/30/energy-bills-standing-charges-are-not-standing-still

Whatever happened, it is still true I think that costs that were on unit prices moved to standing charges at the time.

You can see this in the ofgem tables that were published with the price cap at the time.

Of course infrastructure spending has increased at the same time and will continue to increase even with solar, batteries, energy efficiency, block tarrif, time of use and type of use tariff etc. 

It is what it is now. I honestly don't know what is best. But whatever is proposed it has to be simple for the average punter, it has to be affordable for everyone and it has to be sellable to the public. We also need a change programme to get us to 2050. 

Both Conservatives and Labour got stuck on the change programme.  Here is just one example, with Ed talking about the gas boiler ban. The approach has to be sellable to the electorate.

https://www.edie.net/ed-miliband-labour-would-scrap-tories-2035-gas-boiler-ban/

It will be interesting to see what is said about energy in the Budget when talking to Jo Public and how many people get on board and how quickly.

@transparent

The people it would penalise are those where teenagers rush home from school, throw all their uniform in the wash, turn on TV and computers in bedrooms, whilst parents cook and recharge their EV to go out in the evening.

To be honest, I find that a bit harsh for working families - particularly the lower waged.

I think of my kids and their families who work their socks off and have kids converging early evening, eating, home-working, play-stationing, TV watching or whatever plus my son-in-law collapsing into a hot bath and throwing filthy clothes into the washing machine because he's a builder - these things are not moveable, they're not 'lifestyle choices' they are just life. 

Britain is in this mess because it is one of only two countries that privatised their national grid and mostly outsourced its brains too. That doesn't make state owned grids necessarily very much better - the Netherlands, for example, has many similar problems. But there's more state funding going in to get infrastructure up to speed and state money going into academic research. 

In Britain it is one part of the overall excessively marketised energy provision we have in this country.  Time-of-use habit change is an unfortunate necessity but it shouldn't be allowed to penalise families just to cover for the absolutely disastrous management of our national infrastructure. 

My kids are grown and I am freelance in my work but for many people there is no choice in their timing of energy use. Kids have to go to bed early. People work horrendous hours in demanding jobs and go to bed and get up early too. 

I worry that so much of our energy policy is split into a view of 'the public' as either 'Mr and Mrs middle class' or 'the deserving poor' who have to 'be told'. That's the way of thinking that underpinned that disastrous cut to the Winter Fuel Allowance. We'll never get out of this climate mess by thinking like that. 

I think what I like about the tiered system is it is fair and simple to operate. 

I don't have too much faith in Mr Miliband's ability to manage all this mostly because he's beholden to Ms Handbag Theory of Economics Reeves and her unshaken belief that PFI 2 is the answer to life-and-the-universe. Sadly. 

Meanwhile, I'm glad you are getting under the skin of SHDC. They need it. 😁

Posted by: @lucia

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I find that a bit harsh for working families - particularly the lower waged.

I'm unsure whether I should be apologising for describing the effect of a block tariff...

... or praising the last government for having decided against introducing it when the UK was reeling under the effects of the 2022 energy crisis.

In truth I doubt that government or Ofgem even know that Block Tariffs are an available option.
The SMETS specifications are a scientific document, rather than a piece of legislation.
Moreover they they only state the What, rather than the Why a particular feature is described.

Posted by: @lucia

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Britain is in this mess because it is one of only two countries that privatised their national grid

The licences to maintain and run the Transmission and Distribution networks have actually worked pretty well. I've met with many engineers and managers across National Grid (who are also my DNO) and I'm generally impressed.

However, I'm greatly concerned at the ownership of the companies who are obtaining permission to connect generation and storage assets to our electricity grid. Our Standing Charges and Use of Service (UoS) portions of bills are heavily subsidising the required infrastructure upgrades. But the overseas investors and shareholders will be able to enjoy their dividends beyond the reach of HMRC.

There is no way to ensure that 'our' payments for infrastructure can result in lower bills.

That's from yesterday's speech by the Secretary of State for Energy.

Yes, it's cheaper... provided you ignore the massive costs of infrastructure.