Smart talk plans

Pay more for electricity during peak hours under surge pricing plans

Kwasi Kwarteng has endorsed plans to charge households higher energy bills if they charge their phones or boil the kettle on a Friday night, in a bid to prepare Britain’s creaky electricity grid for the end of fossil fuels.

The business secretary said it “makes perfect sense” that consumers will face higher costs at the busiest times of the week, the strongest sign yet that a radical shake-up is being considered by the ministers.

Surge pricing proposals aim to reduce power consumption peaks that strain the grid.

Today, gas and oil-fired power plants can be turned on to meet this jump in demand, but it is more difficult with solar panels and wind turbines that vary in power.

Under the new billing system, households would be charged less when few people are consuming energy, such as in the middle of the night. They would pay more sometimes – like on Friday nights – when lots of people are cooking, watching TV or making themselves a cup of tea.

The plans have already won support from energy companies, but risk sparking controversy among customers.

Speaking on a podcast published by Aurora Energy Research on Friday, Mr Kwarteng said: “If we’re serious about net zero and energy efficiency and we have a more agile system, we probably need to look at what’s going on. is called price discrimination.

“So if you charge your phone on a Wednesday morning at 2 a.m. it will cost you less than if you were to do the same thing say on a Friday night when people use a lot more electricity.

“At the moment it’s just the same overall price. So I think we can do a lot of work to create a more agile system that reflects real economic activity at the time.

“In order to make it more efficient, we probably need to have more continuous pricing, and more variation, in terms of you know, how we pay to charge electricity, or even put a kettle on.”

Consumer rights groups have warned that the proposals could impose additional costs on people with poorly insulated homes, outdated appliances or health conditions requiring round-the-clock assistance.

But Mr Kwarteng said the current approach entails unnecessary costs. He also suggested that localized pricing for different areas could be looked at, but that would likely be technically more difficult.