Scotland’s net-zero target means that the ways in which we consume electricity are changing.
One of the changes already underway is the introduction of Time-of-use (ToU) tariffs. This type of tariff encourages consumers to use electricity when grid demand is lower, or generation from renewable sources is higher. Although currently only offered by one supplier, ToUs are predicted to become increasingly popular in the near future.
Whilst a more flexible electricity grid offers opportunities, there’s also the risk that it could create new inequalities and vulnerabilities for consumers. In supporting a net-zero and climate resilient society, we need to ensure that tackling inequality and injustices are also part of the transition.
Our latest report looks at the implications that dynamic ToU tariffs could have for vulnerable households. The research included a literature review, surveys, focus groups and interviews with households and social landlords.
What did we find?
- Awareness of these tariffs is very low.
- Consumers would only be likely to switch to this tariff if it saved them money. As current financial savings are minimal, encouraging uptake will be challenging.
- The tariff was generally perceived to be unjust. It’s seen as favouring energy suppliers and wealthier consumers who can afford smart and/or storage technologies.
- Non-vulnerable consumers saw a loss of flexibility in their daily routines as the main challenge to adopting the tariff. Vulnerable consumers reported that health issues and a need for greater knowledge and understanding were the main obstacles.
- Residents of the Scottish Islands and Highlands voiced concerns. They already experience many barriers to the energy market: higher energy prices, areas of low/no mobile signal and internet connection, delays in the smart meter rollout (essential for ToU tariffs) and lower choice of energy suppliers.
“In the context of a just transition to net-zero, an important question posed by participants and by this research is ‘for who’s benefit was this tariff created?”
The report concludes with a series of recommendations, co-created with the research participants, exploring how dynamic ToU tariffs could be made more attractive and appropriate to vulnerable consumers.