The Challenge
One criticism of a fixed off-peak electricity tariff is that wholesale electricity prices are changing.
Historically, the cheapest electricity was almost always available overnight, when demand was low and wind generation continued to produce power.
Today, increasing amounts of solar generation mean that, on many summer days, electricity is cheapest during the middle of the afternoon. Sometimes wholesale prices even become negative as supply exceeds demand.
This is not a problem. It is evidence that Britain is successfully adding low-cost renewable generation.
The question is how consumers should benefit from this changing energy system.
Simplicity Matters
Our policy is built on one simple principle.
Households should not have to monitor electricity markets every day or understand 48 different half-hourly prices.
Energy tariffs should be:
- predictable
- easy to understand
- stable over many years
- suitable for every supplier
A national off-peak period provides certainty for households while allowing suppliers and network operators to plan effectively.
Solar Is Not Constant
Summer afternoons can produce enormous amounts of electricity, but solar generation is also one of the most variable sources of renewable energy.
A single weather front can reduce solar output dramatically within minutes.
Unlike overnight wind generation, afternoon solar cannot always be relied upon to produce the same output every day.
This is why we believe surplus solar generation should increasingly be stored rather than simply sold at extremely low or negative prices.
Battery Storage Is the Missing Piece
Instead of accepting negative wholesale prices or curtailing renewable generation, we believe large battery farms should increasingly be co-located with solar farms.
This allows excess electricity generated during sunny afternoons to be stored and released later during the evening peak.
The benefits are significant:
- reduces evening wholesale prices
- improves utilisation of solar generation
- reduces renewable curtailment
- provides greater grid stability
- creates a more consistent supply of low-cost electricity
Rather than solar only producing electricity when the sun shines, battery storage allows it to become a controllable source of energy.
Most Household Demand Is Better Shifted Overnight
Although cheap afternoon electricity is useful, it does not suit most household demand.
Many people are away at work during the day.
The largest flexible household loads naturally occur overnight, including:
- charging electric vehicles
- running heat pumps to pre-heat homes during winter
- heating domestic hot water
- charging home batteries
- operating washing machines and dishwashers using delayed start timers
These activities require little or no user interaction and make efficient use of spare overnight network capacity.
Summer Surpluses Help Everyone
Cheap summer electricity is not a reason to create increasingly complicated tariffs.
Instead, it strengthens the economics of a consistent national tariff.
Periods of exceptionally low wholesale prices during summer reduce the overall annual cost of electricity.
Those savings help offset more expensive periods elsewhere in the year, allowing households to benefit from a stable and predictable tariff rather than constantly changing prices.
Consumers value certainty just as much as low prices.
Britain Still Has Spare Capacity Overnight
Even as daytime solar generation increases, Britain continues to have significant unused capacity overnight.
Nuclear power stations are designed to operate continuously and are most efficient when generating at full output 24 hours a day.
Wind generation also frequently produces substantial overnight output.
At the same time, demand falls dramatically once homes and businesses become inactive.
This creates an opportunity to make much better use of infrastructure that already exists without building substantially more network capacity.
The Future Will Need More Electricity
The current afternoon surplus should not be assumed to be permanent.
Over the coming decades Britain is expected to see significant growth in electricity demand through:
- electric vehicles
- heat pumps
- industrial electrification
- AI and data centres
- domestic air conditioning as summers become warmer
As these technologies become more widespread, today’s afternoon surpluses are likely to reduce naturally.
Building an electricity tariff around today’s weather patterns would therefore be short-sighted.
Our Position
We believe Britain needs electricity pricing that is simple, predictable and affordable.
Rather than asking households to become electricity traders, we should:
- maintain one clear national peak and off-peak tariff
- use battery storage to smooth renewable generation
- make better use of spare overnight capacity
- allow abundant summer renewable generation to reduce costs across the entire year
- keep tariffs stable so households and businesses can invest with confidence
The energy system will continue to evolve. A well-designed tariff should evolve behind the scenes while remaining simple for the people who use it.