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Does timing your energy usage really help with bills?

turning on radiator
turning on radiator

As winter draws in, energy bills are creeping up. While millions of households have tried to cut back their consumption over the summer, colder nights are making it harder to resist switching the heating on.

Tips and tricks abound to help savers cut back their energy bills, including timing your usage around peak demand.

This week the National Grid has urged people to “save money and back Britain” by using more energy during off-peak times. But climate minister Graham Stuart told Sky News this morning that for most people, timing was unlikely to have a big impact on costs.

Mr Stuart told Sky: "There are good reasons why people might want to, you know, take a shower rather than a bath because it cuts their energy bills. Most of the time, except in peak [time] because of the nature of our energy system, it doesn’t make any difference to our energy security. It’s different in Germany, it’s different in Holland.

"The last thing you want to do is tell someone [to] 'switch things off for the national need' when it makes no difference to the national security position,” he said.

Telegraph Money explains how timing can affect your energy bill, how this compares against Europe and if energy rations are really coming this winter.

Do energy providers charge more at different times of the day?

Some providers will offer their customers an option to pay less for using electricity during off-peak hours when demand is at its lowest. This is usually between 11pm and 8am.

When your energy is billed this way, it is called a “time-of-use tariff”.

However, most suppliers charge a flat rate for electricity. This means that no matter when you turn on a device, it will cost you the same amount.

You can tell what type of tariff you are on by looking at your electricity bill. If it shows more than one rate according to the time of day, then you are on a time-of-use tariff.

Can I save money by using more electricity at night?

If you are on a time-of-use tariff, then it is possible to save money by using electricity during off-peak windows.

An “Economy 7” or an “Economy 10” tariff offers seven or 10 hours of cheaper electricity. Homes on these tariffs require a dual-rate meter or a smart meter, which record how much electricity you use at all times of the day.

If you are on this kind of tariff, then you could save some money by using major appliances such as washing machines and dishwashers around off-peak times.

However, you should bear in mind that it may not always work out cheaper to use an off-peak tariff. With some time-of-use tariffs, the daytime rate can be nearly twice as much as the off-peak rate, according to the price comparison website Compare the Market.

There are around 2.5 million time-of-use tariffs currently active in the UK, according to uSwitch, a comparison service.

Does it work differently in Europe?

Kate Mulvany, of the energy consultancy Cornwall Insight, noted that broadly speaking, European energy providers tended to be more flexible around paying different rates based on time of use.

“It is a result of a combination of customer habits and market design,” she said. “In some European countries, there are stronger price incentives to time your energy usage.”

Ms Mulvany added that while some energy providers such as Octopus had developed products around time-of-use strategies, overall Britain lagged behind suppliers on the continent.

Will Owen, of USwitch, said: "Italy has a larger share of households on time-of-use tariffs, while Estonia, Latvia, Spain, Slovakia, Slovenia and Bulgaria predominantly rely on hourly real-time pricing.

"In Finland, 9pc of customers are on a dynamic tariff where prices rise and fall based on demand and supply."

Are there going to be energy rations this winter?

The National Grid has struck a confident tone in its base case scenario for this winter, which assumes sufficient energy surplus throughout the season.

However it warned in its worst case scenario – reduced electricity imports from Europe and insufficient gas supply in Britain – it could be necessary to implement a temporary “rota” scheme.

This would mean some households could be without power for pre-arranged periods during a day, in three hour blocks. It said that this would be necessary to ensure the “overall security and integrity” of the British electricity system.