For a current instance, costs dropped to -10.08p/kWh at 3am on the third Jan 2022, and -4.63p/kWh at 3pm on the eleventh Jan 2022.
However Agile has by no means by no means been completed earlier than, and that’s due to the complexities concerned in vitality pricing. We’ve damaged down the pricing mannequin beneath.
‘Agile’ pricing
We wished to:
- Hold vitality clear by reflecting the entire cost-breakdown concerned
- Make Agile easy for buyer useability
Balancing these two key issues, an instance Agile value algorithm is:
On this instance…
The Agile value is 2.2 instances the wholesale value of vitality and between 4.00pm and seven.00pm a further 12p / kWh is included (however capped at 100p / kWh, come what could).
There’re a number of widespread questions this usually prompts:
Why is there a penalty on the peak interval? Why is there a 100p cap? How effectively does Agile mirror renewable provide?
To grasp that, we have to take a look at what makes up our prices.
These are surprisingly advanced and made up of a spread of variables…
- Wholesale – the wholesale value of vitality can fluctuate heaps, starting from low unfavorable numbers (when technology is absolutely excessive, and demand is low) to over 200 p/kWh. Earlier than the vitality disaster, it was round 5 p/kWh in a single day and 9 p/kWh at peak, within the present market circumstances, it’s round 22 p/kWh in a single day and 36 p/kWh at peak.
- Transmission prices (TNUoS) – this is dependent upon your area however can vary from 4p/kWh to 9p/kWh and is simply relevant for utilization in peak intervals (4-7pm). It’s costlier within the South, usually, due to the North-to-South transmission course (i.e. there’s extra vitality technology within the North and demand within the South).
- Balancing prices (BSUoS) – usually round 1 p/kWh and is sort of unstable. Costlier at evening when the shortage of demand and technology on the grid means extra balancing actions are required (that is in all probability a gross simplification for anybody who’s labored within the Nationwide Grid management room).
- Distribution prices (DUoS) – these are priced in blocks, and usually round 5-16p / kWh in peak and near zero off-peak. For a non-half-hourly (normal, single fee) tariff, there’s a flat distribution fee.
- Capability Market – can work out at round 5-10p/kWh for winter peak utilization (4-7pm weekdays between Nov and Feb) and varies by area.
- Renewable Obligations – flat payment of round 2.6 p/kWh.
- Feed-in Tariff – flat payment of lower than 1 p/kWh.
- Contract for Distinction – varies each day earlier than the vitality disaster it was usually round 3-5p/kWh, however within the present market circumstances it’s round -0.8p/kWh because of excessive wholesale costs.
To revisit the query – why is there a penalty on the peak 4-7pm interval?
Should you add up the height prices outlined above that we’ve got to pay (TNUoS, DUoS, and Capability market) it’s truly larger than 12 pence. Though partly that is compensated for by the two.20 multiplier. The problem for us is deciding that multiplication issue for the entire day and the additive component to cowl the height interval additional prices we’ve got to pay.
Why is Agile’s unit fee capped at 100p / kWh?
The Ofgem value cap for traditional variable tariffs is at the moment at 52p /kWh, so a 100p cap could sound excessive as compared. BUT: our wholesale prices can exceed 200p / kWh in peak intervals. If we uncovered the total peak wholesale price in Agile’s pricing, the height charges would get completely extortionate for a home buyer.
A totally flat fee tariff goals to common out the entire day variability of all of the completely different costs, however with Agile we will’t do this. To keep away from points we set a cap at 100p / kWh.
What else may we’ve got factored in?
There are a number of parts that aren’t mirrored in Agile’s pricing, for the sake of simplicity, like the regional distinction in transportation prices (TNUoS) and seasonal distinction between winter and summer time.
These components – notably regional variation – we may match into Agile’s pricing as we study extra from clients and refine the algorithm.
This actually illustrates the problem with a tariff like this (and why nobody’s had the useful resource or wherewithal to attempt it prior to now) – you need to strike a stability between simplicity for the sake of usability, and guaranteeing the costs are as reflective of the extremely advanced and various prices concerned as attainable.
Carbon Depth information
With the associated fee made up of so many advanced components already, Agile pricing isn’t as formally tied to the ‘greenness’ of vitality as we’d like. Provided that we designed Agile Octopus to encourage vitality use at instances with low demand, and the stuff being produced is usually inexperienced, we’ll positively look to think about Nationwide Grid Carbon Depth information to extra intently observe renewable provide. The low Agile value intervals do usually coincide with excessive renewable vitality technology.
The true drive for Agile is utilizing value to assist change behaviour. You want solely take a look at the effectiveness of Uber’s surge pricing mannequin to see how dynamic, capacity-based pricing can be utilized to successfully management provide and demand. Equally our personal Agile report confirmed vital affect too.
As Agile is designed to get nearer to reflecting the really dynamic prices of vitality – and seeing how customers reply – the method exaggerates the distinction within the prices *we* face (ie peaks are disproportionately excessive; and low cost intervals are disproportionately low cost). It’s because we are attempting to mirror the realities of the physics of the system – however there are a lot of subjective questions, akin to how mounted prices are shared, or whether or not peak prices needs to be borne by the marginal consumer, and so on. We do that as a result of we wish Agile, and reactions to it, to tell adjustments to the best way we (and different corporations) pay for entry to networks and the grid.
In consequence, Agile could also be a giant lossmaker for us, or could also be excessively worthwhile. It is nonetheless experimental, so we’d amend the method or introduce new variables into the combination, however will after all give loads of discover ought to that occur.
Agile is thrilling as a result of it is actually paving the best way to the vitality system of the long run and we, and the purchasers who use it, are a part of that experiment.
On the left hand facet of the assertion you may see:
Complete Rebate
The overall determine we’ll credit score again to your account.
That is calculated by multiplying the unit fee for every half-hourly interval by the kWh exported throughout that interval.
We spherical this determine by 3 decimal locations, e.g. 0.3516p is rounded to 0.352p.
After we’ve calculated the rebate for each half-hourly interval, we’ll spherical the whole from all intervals to the closest entire pence, e.g. 0. 516p is rounded to 0.05p.
Complete export
That is the whole export determine for all 48 half-hourly billing intervals. This determine is rounded to 2 decimal locations, i.e. 4.759 kWh is rounded to 4.76 kWh.
