THE BLOG

It's Time to Get Smart About Energy Tariffs

20/01/2014 10:18 GMT | Updated 19/03/2014 09:59 GMT

I'm going to open with an indisputable truth: the UK suffers from an exceedingly antiquated attitude towards energy provision.With every other part of modern life becoming customisable and flexible, the sector remains as rigid as it has ever been.

The incongruity is perhaps best demonstrated by way of an example, so let's take the telecommunications industry: when buying a phone contract,the customer chooses a rate that includes data allowance, minutes and texts to suit their individual usage. If their needs increase they can expand their tariff accordingly, and are able to cut down on any excess in the same manner. Simple.

Now, imagine that the cost of your phone contract depended upon some arbitrary factor such as, say, where you lived rather than how much you actually used the device. You would question that logic. You would also question a bill that included charges for calls you didn't make or texts you didn't send. In fact, questioning is probably the least you would do; in reality, you'd probably change providers.

Flipping back to the energy industry, however, this is where the problem arises. Consumers have grown so used to being ridden roughshod over by great energy behemoths that they have lost the ability to look outside the box, and see no issue with sticking to tariffs that charge according to the time of day rather than the far more accurate measure of when peak use actually occurs and therefore places the greatest strain on the grid. It perhaps isn't as worthless a measure as geographic location is for phone contract cost, but it isn't far off.

Energy providers should be falling over themselves to offer customisable contracts that expand and contract as necessary. Furthermore, electricity should be more expensive when it is busy, and less when it isn't, as this will encourage energy users to spread out their consumption and lessen the strain on the grid. Consumers should be rewarded if they avoid measurable periods of congestion, not just if they stick the washing machine on at 10.30pm instead of 5.

This dream is not out of reach, either. The advent of smart meters brings with it a new era of potential for managed energy, and with the Government planning to install one in every UK home by 2020, we could soon see the results of a far more efficient and transparent system. If a consumer can see exactly where their bills come from, suddenly energy becomes a tangible entity and the difference made by switching the lights off when you leave a room becomes clear.

Besides smart metering, the internet also presents a huge opportunity in energy management; soon we could all be remotely controlling our central heating and lighting from the office or even abroad, keeping a constant check on usage and reducing waste. Only at this point will the energy industry finally be keeping pace with what should, given the availability of technology, be standard practice by now.

We've come to expect a tailor-made approach in almost every area of a 21st century existence, and it's time for the energy industry to play some serious catch-up.