Smart meters ‘will be used to hike prices at peak times’

ENERGY firms using smart meters have a ‘hidden agenda’ to charge customers more when demand for power surges, an expert has warned.

The technology has been promoted as a way of ending estimated bills and giving households real-time information on how much energy they are using.

But it will also allow firms to introduce a raft of new tariffs that will hit those who use electricity and gas at peak times with higher charges.

Under these ‘time of use’ tariffs those who use appliances at offpeak times overnight will be rewarded with low rates. This will have the effect of spreading out demand over a 24-hour period.

But the move towards such tariffs raises the prospect of surge pricing during holidays such as Christmas and Easter when millions are using appliances at the same time. The former head of gas and electric meter technology at the energy regulator Ofgem, Jerry Fulton, said the industry will quickly move beyond a two-tier peak and off-peak system to prices that change every 30 minutes depending on demand.

He told The Daily Telegraph: ‘I believe that the hidden agenda behind smart meters is that they will allow half-hourly charging.

‘Instead of having two charge rates – day and night – the price of energy will change every half hour, so when solar and wind generation are low and usage is high the price of electricity will rise steeply.’

Unlike ordinary meters, smart devices transmit data to suppliers about when households use most energy. The default setting it to send a total usage figure once a month but customers can change this to as often as every half an hour.

These regular updates are essential for those on a tariff where prices vary depending on the time of day. This type of tariff was first offered by British Gas two years ago in trials giving smart meter customers free electricity to shift heavy power use, such as doing the laundry, to off-peak weekend periods.

A smaller provider, Green Energy UK, already has a ‘timeofday’ tariff where prices vary between periods of high and low demand. It charges five times more for electricity used in early evening than it does overnight.

More of these types of tariffs are expected as the £11billion Government rollout of smart meters continues. They are not yet compulsory but suppliers must at least offer every household a smart meter by 2020.