Ofgem has said it will relax licensing and data sharing rules in order to let tech firms introduce the new gas and electric tariffs.
Households will soon be rewarded for turning lights off at night and heat off in the winter, under official plans to let technology firms like Google and Amazon to provide energy to British Homes.
The Government and regulators want radical new “time of day tariffs”, where energy prices fluctuate depending on availability, to be widely used by millions of families by 2020, Ofgem told the Daily Telegraph.
At present only one supplier, Green Energy UK offers a time of day tariff.
But Ofgem has said it will relax licensing in order to let tech firms introduce the new gas and electric tariffs, which will have more control over appliances in people’s homes than traditional arrangements.
Under the arrangements suppliers will be able to switch consumer’s appliances – like TVs and washing machines – on or off during times of high or low demand.
The scheme is designed to save billions in electricity bills, but it is likely to raise further questions on privacy and data security for households who choose to move to such contracts to reduce their bills.
Such tariffs will lead to householders paying more for watching television, charging gadgets and running the dishwasher during morning and evening “rush hours”.
To choose to sign up to the scheme consumers must first have a smart meter installed, which transmit information about when a household uses most energy to suppliers, giving them the power to increase bills at busy times.
Andy Burgess, associate partner at energy regulator Ofgem, said : “We want time of day tariffs to be commonplace by 2020. We will make this happen by letting other types of firms, for example technology companies like Google or Amazon, to enter the sector and innovate.
“If they introduce time of day tariffs then Big Six energy companies will either have to change to keep up, or lose money.”
Google and Amazon have expressed interest in the energy sector by setting up energy arms, however it is not known whether they will enter the market to provide new smart tariffs.
Business and Energy Secretary, Greg Clark, added: “Upgrading our energy system to make sure it is fit for the future is a key part of our Industrial Strategy to deliver a smarter, more flexible energy system. A smarter energy system will create new businesses and high-skilled jobs, while making sure our infrastructure is able to cope with demand.
By rolling out smart meters, enabling suppliers to offer lower tariffs and making it easier for firms to develop smart appliances and gadgets, the plan will help consumers use energy when it is cheapest or get rewarded for returning it to the grid when it is needed.”
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ARTICLE CREDIT: The Telegraph, published 24th July 2017.
