He said this was partly necessary because a future grid was likely to come under extra pressure from millions of electric cars being plugged in, so “it needs to be more efficient”.
“Whereas a world where you have more nodal pricing, I don't know about the technicalities of that… but it should be looked into, where you have more localised pricing or you have more continuous pricing, which reflects the supply and demand for electricity at any moment." Mr Kwarteng said: “A world where you have quite rigid national prices, which stay the same regardless of demand or supply at any single point, that's quite a rigid system and it builds quite a lot of cost into the system. He also suggested localised pricing for different areas could be looked at but that this was likely to be more technically difficult. “In order to make it more efficient, we probably have to have more continuous pricing, and more variation, in terms of you know, how we pay for charging electricity, or even putting a kettle on."Ĭonsumer rights groups have warned the proposals could force extra costs onto people with poorly insulated homes, old-fashioned appliances or health conditions that require round-the-clock support.īut Mr Kwarteng claimed the current approach leads to unnecessary costs. So I think there is a lot of work we can do to make a more nimble system that reflects actual economic activity in the moment. “At the moment, it's just the same blanket price. “So that, if you charge your phone on a Wednesday morning at 2am, it's going to cost you less than if you were to do the same thing let's say on a Friday night where people use a lot more electricity. 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 having a more nimble system, then we have to probably examine what is called price discrimination. The plans have already won support from energy companies but are likely to prove controversial with customers. They would pay more at times – like Friday evenings – when lots of people are cooking, watching television or making a cup of tea. Under the new billing system, households would be charged less when not many people are using energy, such as in the middle of the night. The surge pricing proposals aim to reduce peaks in power usage which put the grid under heavy strain.Īt present, gas and oil-fired power stations can be switched on to cope with this jump in demand, but this is harder with solar panels and wind turbines that vary in output.
The Business Secretary said that it “totally makes sense” for consumers to face higher costs at the busiest times of the week in the strongest sign yet that a radical shake-up is being considered by ministers. Kwasi Kwarteng has endorsed plans to charge households higher energy bills if they charge their phone or boil the kettle on a Friday evening, in a scramble to prepare Britain's creaking power network for the end of fossil fuels.
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