‘I cut my power bill from £1.5k to only £300’

Owners of electric vehicles and storage batteries have been paid to use energy on five occasions in the past few months, as they have taken advantage of so-called “time-of-use” tariffs.

The concept of a tariff which charges households different amounts at different times of day is not new. Economy 7 tariffs, which cost customers less at night, have been around for decades.

The new breed of time-of-use tariffs that experts say are about to become commonplace use modern technology, including smart meters, to track the underlying cost of energy every half-hour and shift prices accordingly.

Currently, the only such deal on the market is the Agile tariff from medium-sized supplier Octopus. The firm said thousands of people have benefited from negative pricing. This means they were effectively paid to draw energy from the grid, most recently overnight around a fortnight ago.

Dr Jonny Marshall, of the Energy and Climate Intelligence Unit, said more suppliers were likely to launch similar offerings, especially as electric vehicles become more popular. “As we move towards a more renewablebased grid, flexible demand will become more common,” he added. “You will be able to charge up bits of kit in your house when it’s cheap or store up your heating with a pump.”

Greg Jackson, the chief executive of Octopus Energy, said: “As you have more renewable energy on the grid, there are times that we have more electricity than we need. When the wind is blowing, we sometimes have to turn the turbines off as there’s nowhere for the power to go.

“If there are people who still want that power when it’s available, you can effectively be giving it away for a huge discount or even for free. It’s like when there’s a bumper crop of tomatoes, the supermarkets will have cheap tomatoes.”

In the 12 months to April, energy firms paid £173m to turn off wind turbines to prevent oversupply, adding an average of £6 on to utility bills.

However, in order to properly take advantage, households need technology which is costly for many. This could be a battery, which can draw power from the grid at cheap times and release it into the home when needed, or a heat pump.

Dr Marshall said: “A standalone battery is still quite expensive, but batteries in electric cars are becoming much more economical.

“There are going to be a few policy changes for company cars, which could mean we will see a huge number of electric cars coming on to the market. When they are £10,000 rather than £30,000, they will become a lot more popular.”

‘I TRY TO RUN EVERYTHING OVERNIGHT’

Retired tech developer Sarah Brown believes her electricity bill will be just £300 this year – a saving of £1,200. Even though she is only 46, success in the dotcom bubble has allowed her to retire early. Her house in Cambridge is kitted out with as much energy-saving gear as possible, with solar panels and a storage battery.

“I try to run everything overnight,” she said. “The battery tracks the cheapest times to buy energy and it trickles it out throughout the day.”

The clever management of her energy use combined with her solar panels means she typically pays about 7p per kilowatt hour for power. A kilowatt hour usually costs 11p-16p. “We pay Eighties prices,” she said.

She said she understands the hesitancy of some people, who fear they will pay through the nose for cooking their dinner at a reasonable time of day, particularly in the winter.

“The battery does help with that,”

Grant Thomas, above, has made big savings, as has Sarah Brown, right she explained. “The battery will discharge enough power to cook a basic dinner. If you want to cook a big roast dinner then you might pay more, but how often do you do that?”

Grant Thomas, 48, from Hampshire, initially joined Octopus on another tariff aimed at electric car owners but quickly moved to the agile deal when prices were due to drop below zero. Details of what the half-hourly price will be are announced regularly by the company so that households can plan.

Mr Thomas, a manager at tech firm IBM, has a storage battery in his garage and a smart home system that tracks energy prices to ensure the battery is charging when it is most economical to draw power from the grid. After switching to the agile tariff Mr Thomas charged his battery, the battery in his car and put the dishwasher on, using 95 kilowatt hours of power and paying 86p. This amount of power would usually cost almost £13.

He said he still has to alter many of the settings of his energy use via his mobile phone but in the future he hopes this will happen automatically.

“We only buy electricity when it is below 6p per kilowatt hour, which is almost a third of the price we used to pay,” he added. “This will be the norm in five or 10 years.”

WHAT ARE THE DOWNSIDES?

Some people fear energy firms will charge rip-off prices at peak times.

Dr Marshall said: “More people will use time-of-use tariffs but it doesn’t seem like they will be enforced. Even if 30pc of homes shift to one, it will have a major impact.”

There are also other, cheaper electricity tariffs, according to Victoria Arrington from switching website Energyhelpline. She suggested getting a cut-rate deal that works with all kinds of meters. “There are some excellent deals that don’t rely on timing or smart meters,” she added.

Mr Jackson said “it’s a choice” and “we aren’t robbing Peter to pay Paul”. “We make use of excess capacity on the grid to give people cheaper power,” he added.

Technology is changing the way people pay for energy. Sam Meadows meets those who are making big savings ‘A battery tracks the cheapest times to buy and trickles it out during the day’