Consumers can benefit from a wider range of cheaper energy deals due to new requirements for smart appliances like heat pumps and electric vehicle chargers.
Energy Smart Appliances allow consumers to shift their electricity usage to times when it is less costly for the energy system. When an appliance’s smart function is activated, it will respond to price signals and can then use energy when it is cheapest, such as overnight.
Many are already cutting their bills by taking advantage of off-peak deals. For example, electric vehicle owners with a typical annual mileage can save £332 a year by charging their cars overnight using a time-of-use tariff.
A new framework will introduce requirements for heat pumps to be sold smart-ready, in line with regulations that already apply to electric vehicle chargers. This will give heat pump owners the choice to activate smart functionality and make savings by heating their homes when energy is cheaper. This can save around £100 per year compared to the costs of a gas boiler.
The government will also ensure that a range of appliances including electric vehicle smart charge points, heat pumps, and battery energy storage systems must be able to operate across different tariffs. This will mean that devices are not tied to one energy supplier, and so consumers will not be locked into one plan. This will deliver savings by encouraging competition and allowing customers to shop around for the best deals regardless of what device they have.
The measures form part of the government’s Clean Power Action Plan, which sets out pro-consumer reforms to help households benefit from lower energy bills.
Energy Minister Michael Shanks said, “From EV chargers to heat pumps, smart appliances can do the hard work for consumers by automatically using energy when the price is low. We want to put more money in people’s pockets as part of Our Plan for Change by making it easier for people to benefit from cheaper off-peak tariffs in their home.
“These new standards will also bring a common-sense approach to smart appliances by ensuring different brands and models can operate across different energy suppliers, allowing consumers to shop around for the best deals.”
Tough new cyber security standards will be introduced for smart appliances, to protect customers and their data from cyberattacks.
Not only will these measures help smart energy consumers to cut their bills, but lowering peak electricity demand would minimise the electricity infrastructure that needs to be built. This could contribute to saving £40-50 billion between now and 2050, leading to further savings for all billpayers.
Increased consumer-led flexibility will help to deliver the Clean Energy Mission, by enabling Britain to make the most of its renewable electricity at times of high generation or low demand, which will reduce the need for expensive fossil fuelled power.
The introduction of the Market-wide Half Hourly Settlement in 2027 will require energy suppliers to use the most accurate data, so they can offer more smart tariffs that allow customers to choose when to use energy and benefit from savings. Earlier this month, the Energy Secretary Ed Miliband and Ofgem CEO Jonathan Brearley wrote to energy companies warning that no further delay will be tolerated to the roll out of this new system, to ensure consumers can benefit as quickly as possible.
