AREyou a smart meter refusenik? I’ve been refusing – or avoiding their calls – for years. What with texts, emails and phone calls, my supplier must have contacted me well north of a hundred times. It’s been harassment, really.
It may be time for a rethink.
Yes, it’s all to do with Net Zero. Of course it is. But it’s no good howling ‘what will we do when the wind doesn’t blow and gas generation is either banned or there is no longer sufficient CCGTs left?’ The political class are not so stupid that this has escaped their attention – not even Miliband is quite stupid enough (close, I grant you). They probably are stupid enough to imagine that battery storage will save the situation (and that really is very stupid indeed). But that is not the only trick they are planning.
I refer to MHHS. Remember the acronym, it stands for Market-wide Half Hourly Settlement.
‘Market-wide’ means you.
For around 30 years, the wholesale electricity market has involved large generators bidding into the pool with a price that may vary every 30 minutes. It’s not a market, really, it’s more of a game with rules made up by the government, so the rules can be changed by the government too – but let that pass. The salient point is that this half-hourly wholesale price variation has not affected the consumer. Instead, we agree a tariff with our supplier and this tariff sets the price per unit for either some fixed period or until further notice. You may opt for a different night rate than day rate, but you know in advance – and for some period ahead – what you will be paying.
MHHS will change that. You too will ultimately be exposed to prices which vary every 30 minutes, so called Time-of-Use (ToU) tariffs. To be more precise, if you have a smart meter you will eventually be able to opt for a ToU tariff, as and when your supplier offers that option.
MHHS is set to ‘go live’ on April 1. That does not mean that you will immediately be offered a ToU tariff. In fact, you will not notice anything much in April. What the ‘go live’ means, initially, is that suppliers will start ‘migrating customers’ meter details’ which refers to the process of transferring and updating information about customers’ electricity meters from the current system to the new system designed for half-hourly settlement.
In essence, the migration involves ensuring that all customers’ smart meters (or any meters capable of recording half-hourly consumption data) are correctly set up to support the new settlement processes and that the data from those meters is correctly processed for accurate billing and market operations.
So what does MHHS have to do with Net Zero and the drive for wind power über alles? Everything, of course. And the infuriating thing is that the government, and Ofgem, are careful never to be forthright about the true motivation.
It is not that Ofgem has hidden the move to MHHS; quite the contrary. Publicly available documents, both technical and in plain language, have been issued by Ofgem going back several years. In April 2020 the Ofgem web page Electricity Retail Market-wide Half-hourly Settlement: Draft Impact Assessment | Ofgem referenced a document Market Wide Half Hourly Settlement – Consumer Impacts Paper which informed us of certain aspects of MHHS, as the following extracts illustrate.
‘MHHS, enabled by the smart meter rollout, will facilitate a smarter, more flexible energy system, contributing to the ongoing decarbonisation of the energy sector.’
‘Once market participants face the true costs of their customers’ consumption, they should be incentivised to develop and offer innovative tariffs and other new propositions to their own customers and to all consumers in general. Consumers could be encouraged to manage their energy use better and be rewarded for consuming and exporting electricity at times which are beneficial for the system.’
‘Consumers with load-shifting potential could benefit directly by saving on their energy bills . . . Some (consumers) may take up technology, if they can access/afford it, to facilitate off peak use, e.g., smart appliances, or choose a ‘hassle-free’ option where load shifting is managed by a third party for them. Early adopters of flexibility products/services may in turn encourage other consumers to load shift, for example, by taking up a smart Time-of-Use (ToU) tariff.’
You get the picture. The emphasis is all on ostensible savings to the consumer and saving the planet. But this means ‘savings’ only in respect of voluntarily not using power when the half-hour price goes high. And why would the price go high? This they do not mention . . . but we know why. The price will be high when the wind drops.
In short, the cunning plan to address periods of low wind is to get you voluntarily to cease using electricity. It will be ‘voluntary’ because you can opt to pay silly prices instead if you wish. This is called DSR – demand side response, i.e., ‘voluntarily’ choosing to turn everything off to avoid punitive prices.
Rather chillingly the Ofgem document states: ‘Consumers who use energy at peak may need support to adopt mitigating measures if they cannot change behaviour.’ Re-education, anyone? Oops, sorry, I mean, ‘educating and empowering consumers regarding their energy usage’.
It will not be about your supplier disconnecting you. No, you will do it to yourself.
But do smart meters provide suppliers with the capability to disconnect? If you ask such direct questions you will be met with a response that is supposed to reassure: your statutory rights and protections in respect of disconnection are the same with a smart meter as with your old meter. But the fact is, smart meters DO give the supplier the ability to disconnect. We know this because smart meters can be switched into prepayment meter mode, without any hardware changes. And it is fundamental to prepayment meters that, if you run out of prepaid credit, and exhaust any grace period, disconnection then follows.
Nevertheless, supplier disconnections are not the intended mechanism of control. Instead, it will be your own desire to avoid punitive payments. I don’t fancy having to check the current price every 30 minutes, but more workable facilities will emerge. One is a household of smart devices with the capacity to turn themselves off when the prevailing price exceeds a customer-set level. Another option is so-called ‘aggregation’ or the employment of third-party services to manage your DSR for you.
What it all boils down to, and what is not being clearly and forthrightly stated by Ofgem et al, is that electricity will not always be available at a price most people will be willing to pay. Having supplies that one could rely on to be available 24/7 will apply only for the sufficiently rich. You may have been in countries where the availability of electricity is a matter of luck. That’s where we’re going. Deliberately.
But what about that old unsmart meter? Should you keep it? Initially many people will. And suppliers will be obliged to provide electricity . . . at some price. But when ToU tariffs come in, those who do not opt for them, perhaps because they cannot due to not having a smart meter, will be faced with high tariffs. Of course, because 30-minute ToU prices are the mechanism of demand control and the suppliers, effectively as agents of Ofgem/government, will be trying hard to get everyone on to that system. The flat-rate tariffs will be discouragingly high, one can be sure.
You may, on principle, want to keep your old meter. But I predict that in a year or two you will wonder why, when all it means is paying more than you need . . . and most people will have already adopted the brave new way laid out for them. The game is already lost. We never had any cards to play.
