British Gas does something great…

Yes, you did read the title correctly… and no I haven’t lost my mind. I’m about to congratulate an energy company for seeing the future and attempting to deliver it.

‘Free Energy at the Weekend’ reads the headline, ‘Gotta be a catch’ comes the reply. Well yes, and no is my observation. You may have seen that British Gas are now offering a tariff to households with smart meters which will give them ‘free’ daytime electricity on a Saturday or Sunday.

There is a huge degree of cynicism regarding energy companies, much of it justified. However, this time I think British Gas deserve some credit for taking a punt on what many perceive as the future of domestic energy – so what’s the deal?

Time of use tariffs are nothing new, as anyone who lives with storage heaters will tell you. Economy 7 tariffs, designed as a way of using the surplus energy that non-responsive power stations supply, have been in existence for years. Offering  cheap electricity during the night, and slightly more expensive electricity during the day, they have provided a make-do solution for the imbalance of electricity on the grid. Smart grids are destined to change that – with smart meters being the domestic device that allows this to happen.

The new tariff from British Gas aims to capitalise on the 2.89 million smart meters that have already been installed in homes across the country ( although you can’t yet switch supplier to BG if your smart meters were installed by another energy supplier).    The new tariff does not charge customers for any electricity used between 9 – 5 on either a Saturday or a Sunday (customers choice). Neither does it charge any extra for electricity at other times ( over and above other British Gas tariffs )

Can it save you money?

This is the key question, and it depends how much you can change your behaviour and your starting point. If I punch in my details to a comparison site, the BG tariff is 19% more than the current cheapest deal – the question I then need to ask is can I switch 19% ( or more ) of my electricity use to a Saturday between 9 and 5? The answer, for me, is quite simple – not a chance.

Different households will generate different numbers using the above approach, and for some this might prove financially worthwhile. British Gas conducted it’s own trials and found that the average customer saving was £60 – based on it’s own standard tariff. And that’s the rub of this, it is not the cheapest way to buy your energy.

So why the congratulations?

BG deserve recognition for introducing a tariff that actually has the legs to deliver behaviour change among UK households. Energy monitoring devices have been around for ages and whilst there are some ardent energy monitoring stalwarts (me included) the impact of these devices is rarely sustained after the novelty has worn thin. Improving on this by offering a ‘free’ period gives real control back to households. The joy you can feel by completing your 17th load of washing, safe in the knowledge that all you’ve paid is the 26p standing charge, is not to be sniffed at.

I hope the take up of this tariff proves a success for 2 reasons:

1. It’s one of the first demonstrable and practicable uses for smart meters  -as such it has the ability to be used as an engagement tool on the smart meter shy.
2. It has the potential to make households consider their energy usage as part of their normal routine.

What ever your thoughts on smart meters, or British Gas, this really could be the start of something big…..