What is a time of use electricity tariff?
Here in Western Australia, peak electricity usage times are generally in the afternoon and evening, from around 3pm until 9pm.
Think about your own electricity usage in these peak periods. This could be when you and members of your household arrive home after being out for most of the day. Perhaps this is the time you switch on your heating or cooling, throw dinner in the air fryer, stream your favourite TV series or put a load of washing on – or maybe you do all of these at once.
As the sun goes down, the amount of solar energy being generated across the grid drops, people arrive home and there is a sudden increase in the demand for electricity in the grid. This sudden increase in load reduces the stability of our electricity system. The effect this has on the grid is known in the electricity industry as the Duck Curve.
By understanding how and when you use electricity, you could make more conscious decisions about your electricity usage by taking advantage of what’s known as time of use tariffs. Here’s what you need to know about time of use tariffs and electricity consumption.
Time of use explained
In the energy industry, a tariff refers to how you are charged for the amount of electricity or gas you use. It’s the variable part of your bill which will go up and down depending on how much energy you use. For electricity, there are different types of tariffs which are known as billing rates.
A time of use tariff (or TOU tariff) is a billing rate where the price of electricity varies across different time periods of the day and is usually driven by the level of demand. For this reason, TOU tariffs are also sometimes referred to as interval tariffs.
With TOU pricing, the amount you pay for electricity depends on the time of day that you use it.
A TOU tariff is generally made up of peak and off peak time periods, although there may be other time periods offered such as for shoulder and super off peak time periods. TOU electricity is usually:
- Cheaper during off peak time periods, when demand for electricity is usually low.
- More expensive during peak time periods, when there is a high demand for electricity.
You might benefit with time of use electricity tariffs
TOU tariffs offer a more flexible pricing model than traditional single rate tariffs, which charge the same rate throughout the day. The specific costs, details and peak periods of a given TOU tariff can vary depending on the region and the demand for electricity in that region.
If you’re a Synergy customer, you might be eligible for a TOU tariff, such as our Synergy Midday Saver energy plan which might allow you to take advantage of lower rates during the day from 9am to 3pm (known as Super Off Peak) and overnight from 9pm to 9am (Off Peak).
With a TOU electricity plan, it could be beneficial to think about how to shift as much of your electricity usage to Off Peak or Super Off Peak periods, when it’s cheaper.
How to use more of your electricity at off peak times
To take advantage of TOU electricity tariffs, you need have a smart meter at your home (also known as Advanced Metering Infrastructure or AMI). You can log in to Synergy's My Account to see exactly when you’re using electricity throughout the day – and the impact of any changes you decide to make in switching your electricity consumption times. Just note that your daily interval consumption data in My Account may be up to 48 hours behind.
You might experiment with simple changes to your household routine, such as:
- Setting your washing machine or dishwasher to run during the day instead of at night, to take advantage of super off peak rates. There might also be a ‘delay’ button or timer feature on your appliances to help you to do this.
- Charging up your consoles and other devices during the day, and switching your chargers off when you don’t need them, particularly during times you’ll be charged at peak rates.
- Doing the bulk of your cooking or meal prep before you head out for the day, or setting your dinner to cook during the day in a slow cooker, rather than cooking with your appliances when you get home in the evening.
Simple habit changes such as these could help you to take advantage of different electricity rates at different times of day.
Benefits of TOU electricity for Western Australia
Switching your electricity use to take advantage of TOU electricity tariffs during the day could help you to save on your electricity bill – and has the added benefit of helping to keep the electricity grid more stable.
In WA, balancing the electricity grid is an ongoing challenge, as fluctuating electricity demand and the high number of solar PV systems in our State have a big impact on the stability of our electricity supply. Shifting some of your electricity use to low demand times could help support the stability of the grid. Here’s why:
- If a majority of people in a given area are all home at the same time and using lots of electricity, the electricity grid will experience high demand.
- To meet this high demand, grid operators have to request more capacity from electricity generators than at low demand times of the day.
- It can take some time for electricity generators to increase this capacity, depending on the method they use to generate this electricity.
- If the high demand for electricity can’t be met, there’s a greater risk of blackouts occurring.
TOU electricity tariffs give households an incentive to use less electricity during high demand times, because TOU electricity rates are cheaper at other times of day. By using less electricity during peak times, there’s less need to produce electricity quickly to meet demand, which helps to keep the grid stable.
Your electricity decisions count
At Synergy, we’re helping WA transition to an intelligent energy future by addressing what’s known as 'low load' issues in WA's electricity grid. We’re working on a range of solutions, including the use of Virtual Power Plants (VPPs) to quickly respond to demand changes through coordinating and dispatching electricity when it is needed.
You can also help to support a more stable electricity system by considering a TOU electricity tariff, if you’re eligible, and introduce some simple habit changes. By shifting your electricity use to cheaper off peak time periods, you could find ways to save on electricity costs and help maintain grid stability for the benefit of everyone in Western Australia.