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Saturday, May 30, 2009

Economy 7

I am on an Economy 7 electricity tariff. E7 , as it's abbreviated, offers lower cost electricity at night, but with slightly higher day rate and standing charge.

The original reason for E7 was so the Electricity providers to reduce the peak demand. In very general terms, the electricity we are using now is being generated now. This means that the grid has to anticipate peak demand, fro example the ad break in the middle of "Coronation Street" , when millions of viewers get up and switch electric kettles on.

By encouraging people to use electricity during off-peak times i.e at night, less generators have to be bought online. Also the mix of generators determines the amount of CO2.

For live CO2 data from the grid see

You can see that the mount of CO2 released in grams per unit is at it's lowest at night.
Also lowering peak demand means less power stations needing to be built

The biggest household use of electricity is heating water and space heating. E7 is typically used in conjunction with a hot water tank with immersion heater and night storage space heaters. Night storage heaters absorb heat during the E7 period, using their high thermal mass. They then slowly release this heat during the day. Similarly hot water is heated in an insulated tank during the E7 period, which is then used throughout the day.

A house with E7 heating and water , typically has a separate meter and ring main for the E7 "heavy use" devices. This circuit is switched on and off by the meter at specific times. A good description of this whole idea is here. E7 tariffs include all household electricity, so this means that any item in use during the E7 period (23:30-06:30 GMT, 00:30-07:30 BST where I live ) are charged at the cheaper rate, and any thing in use during he day is charged at the higher rate.

My Mum has this form of heating and she likes it, though it does have it's critics. It's not instant heat, you have to almost plan in advance , how many heaters you need to be on and how hot you want them to get. Each heater has 2 control settings 1) A thermostat which determines how hot each heater gets, hence how much heat it stores and give out 2) A mechanical flap which enables heat to be released at different rates. For example, in the evening you may want more heat to be released.

Now at this point I should say that I don't have E7 heating or hot water. However when we moved into our house in 1991 we had an E7 meter installed , which at that time was free. It may still be , you would have to contact your electricity supplier. We have subsequently purchased white goods which could exploit the E7 cheaper rate. Most German washing machines, dishwashers, tumble dryers seem to have models which have a delay timers, and we tend to use these.

( I think a number of European countries have similar systems, the French have Red Tarrif where electricty is half price all year except 20 nominated days when it's 10 times the price. These days are the coldest of the year, though never a weekend or holiday, and you get advanced warning the day before via a light on the meter. It's a good system as it's entirely optional and means for those 20 days you just have to think a bit about what you use. My mother-in-law has this system and likes it, but she does have a huge wood burning stove, and a couple of UK Storage heaters she can turn on the day before )

In addition a house has a background level of electrical consumption. (see my blog on the CC128 electricity usage meter). Better still during summer, a good chunk of the period extends into my waking day, with the cheap period ending at 7:30. My Mum in Kent, says her cheap rate ends at 08:30 in the morning. Plenty of kettles boiled, toasters run , power showers used , during off peak then.

So, why doesn't everyone just get E7 installed ? Well here is where it gets really complicated, and is the reason for this blog.

As I said at the start, when you are on E7 you pay cheaper night rate per unit (5.159p - Scottish Power) but slightly higher day rate (11.229p Scottish Power) and a slightly higher daily standing charge (15.88p per day with E7 versus 12.88p per day normal tariff. These rates were true at time of writing, and for Scottish Power with my tariff. Different suppliers have different rates. Some have no standing charge, others further subdivide the day by charging different rates for the first n units used. It soon becomes rather complicated.

I decided to try and figure out, for my supplier, whether E7 was actually better for me i.e. for a given rate of use, was E7 more or less expensive than Scottish Powers standard rate.

The maths gets complicated, and while I'm sure there is a formula to calculate this, it's beyond my waning mathematical skills. I resorted to a spreadsheet to model this, please drop me a line via the blog if you want a copy.

It's a bit hard to include a spreadsheet in a blog but here is how it works :

1) You have to gather from your provider the rates i.e the E7 night & day rates, the standard rate and the standing charges for both. My model doesn't work where you have further partitioning of the rates i.e the first 500 units at a certain rate, though it could be adapted.

2) You need to have an approximate idea of how many units you use per day, either by monitoring your meter or going through actual readings. For me it's around 22.

3) the bit you can play with is is the percentage of night used per 24 hour period. In my spreadsheet I can alter the percentage up or down until the E7 total cost is lower than the standard rate. In effect I'm using this percentage value as a slider to see where E7 is cheaper.

Here it is in a simple text form:

Number of days 365

E7 Night rate 0.05159
E7 Day rate 0.11229
E7 Standing charge 0.1588 per day

Standard rate 0.10827
Standard standing charge 0.1288 per day

Average units per day 22
Total Units 8030

Number of day units 7317.739
Number of night units 712.261
percentage night/day 8.87

Total E7 Cost £916.42

Total Standard £916.42

Having entered all the variables (tariff rates ,number of days and the estimated daily use), I just tested different percentages. I found the tipping point FOR MY TARIFF was 8.87% i.e. I needed to use >= 8.87% of my total electricity during the E7 period for E7 to be cheaper.

I was quite pleased with this, as 8.87 % (OK lets call it 10%) is not that much. Assuming 22 units per day, that's 2 units during a 7 hour night time period. Possibly fridges and freezers plus some background computers and sky plus device might account for that alone. I am actually managing between 25-30% during the E7 cheap period, as I'm able to run washing and dishwasher during this period.

Now because of the complexity of the calculation and the various tariffs, the percentage for E7 needed to be used for another persons circumstances may be higher. I seen some tariffs where , dropping the numbers into the spreadsheet, you have to use as much as 38% during the night period in order to make E7 pay. That would clearly require use of night storage heaters and hot water. It's a very complicated area, but I wanted to determine if the widely held belief of " if it's less than 30% use it's not worth it" was true. The answer is more complex. My actual consumption is nearer 25% so I'm comfortably clear.

As my American friends would say :

"Your mileage may vary"

Formula Explanation

Number of days 365 ( a year)

E7 Night rate 0.05159 ( from my supplier website )
E7 day rate 0.11229 ( from my supplier website )
E7 standing charge 0.1588 ( from my supplier website )

standard rate 0.10827 ( from my supplier website )
standard standing charge 0.1288 ( from my supplier website )

Average units per day 22 ( based on previous bills, consumption history or just watching the meter )

Total Units #VALUE! =C1*C10 (Number of days * Average units per day)

Number of day units #VALUE! =C11-C14 (Number of Total Units - Number of Night Units)

Number of night units #VALUE! =(C15/100*C11)
(Percentage of units used during night period * Total units )

percentage night/day 8.87 (Enter example percentage of night to total units - experiment with different figures to see which is cheaper E7 or standard rate)

Total E7 Cost #VALUE! =(C14*C3)+(C13*C4)+(C1*C5) ((Number of night units * Night rate) + (Number of day units * day rate) + number of days * E7 standing charge)

Total Standard #VALUE! =((C13+C14)*C7)+(C1*C8) ((Number of day units + number of night units) * standard rate + (Number of days * standard standing charge)

Update October 2009

I have decided recently to change to Ecotricity as their Green credentials are the strongest of the UK suppliers. They also offer an E7 tariff and , in my area, the percentage night-to-total use rises to around 25%, which is doable for me.

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