Ofgem to overhaul smart meters in push for surge pricing
Millions of households will face surge pricing within the next three years, with smart meters providing energy firms with frequent updates on their power usage.
Ofgem will be granted legal powers in May to change how smart meters operate, with information about usage sent to suppliers every 30 minutes by default – rather than customers opting in as they do at the moment.
Suppliers will be able to use the data to adjust energy prices up to 48 times per day, meaning households could be charged more at peak times.
The regulator is expected to implement the changes by 2025.
The move could result in households being charged more during the busiest periods, facing heftier bills for watching television, boiling the kettle or turning the light on at popular times such as mornings and evenings.
It could also mean people living in poorly insulated homes, or with health conditions that require round-the-clock support may lose out without safeguards.
However, the market regulator told City PM the plans will help boost energy efficiency and the drive to net zero.
An Ofgem spokesperson said: “This major system upgrade is a significant milestone on Britain’s path to net zero. It will enable a more efficient, flexible and greener energy system which will save billions of pounds per year on all consumers’ energy bills. Ofgem will work closely with industry to make sure it delivers this major upgrade while ensuring those in vulnerable circumstances remain protected.”
The developments also follow warnings from industry leaders such as Utilita Energy founder Bill Bullen that households will need to change consumption habits to drive down costs and ensure a greener future for the UK.