Time of use tariffs and heating costs in student accommodation

Given the scale of the potential savings, asset managers need the right data to be certain they select the most appropriate TOU tariff. They also cannot rely on students alone to act and adjust their energy use to take advantage of TOUs. Therefore, the use of energy management systems is an attractive proposition. They can gather appropriate data and take action to adjust heating patterns to capitalise on TOU opportunities.   

In this blog we look at the area of TOU tariffs and explain why energy management systems and heating management especially, are an excellent way to gain the maximum benefit from periods of lower priced energy.

Time of use tariffs are just one of many topics explored in the SmarterDM white paper ‘Intelligent heating solutions – reducing carbon emissions and energy costs for hotels and student accommodation’ that is available as a free download.

What are time of use tariffs and why are they attractive to asset managers of student accommodations?

Time of Use (TOU) tariffs are used by energy suppliers to smooth out demand and reduce the strain imposed on the system during peak demand. TOUs tariffs encourage the use of energy during off-peak times by reducing its price and then charging a higher price for energy during peak times to try to reduce demand.  For the asset managers of student accommodation, this represents an opportunity to make considerable savings to their energy bills if they can select the best tariff and tailor their energy uses accordingly.

An early example of the precursor to TOU tariffs was the ‘Economy 7’ model. At that time, energy was largely produced by coal and nuclear power stations which could not be switched off. This resulted in a surplus of energy and encouraging its use at off peak times made sense. Therefore, the Economy 7 tariff was introduced to encourage people to charge their storage heaters at night at a cheaper rate. 

Today’s UK national grid draws its energy from a much wider selection of sources such as wind, solar, gas, nuclear and bioenergy. Economy 7 has only one flat rate, whereas more modern TOU tariffs have different rates at different times. This allows a more flexible approach to incentivise energy use that best matches the supply available and smooths out demand. 

There are currently 5 TOUs available for domestic consumers that give a good indication of the kind of structure available: 

For large consumers of energy such as student accommodation the savings of moving to a TOU tariff could be considerable and the use of energy management systems is a way to make this possible.

How do intelligent heating management systems help maximise the impact of time of use tariffs in student accommodation?

Intelligent heating management systems can monitor real time energy use and predict heating demands for student accommodation. This allows the asset to be managed to maximise the value of switching to a Time of Use tariff.

An energy management system is the most viable option to gain the full benefit of cheaper energy. It would be very difficult to ask the resident students to adjust their behaviour in line with the timings of a particular tariff.  Students pay a flat rate for their accommodation and energy usage. They are therefore less incentivised to take advantage of TOU tariffs as they will not get the financial reward for doing so. 

Energy management systems can monitor and control heating demand to coincide with the cheapest energy prices without detracting from the thermal comfort of the students. 

Student rooms are often left unoccupied during the day as students attend lectures, or in the evening when they leave their rooms for entertainment purposes. The energy management system can provide data on typical heating patterns across the whole student accommodation. This enables the most suitable and cost-effective TOU tariff for the asset to be chosen.

Student accommodation is also seasonal with 3 terms a year, so rooms are left vacant for around 16 weeks in a year. However, the rooms still require heating to prevent frost and mould damage during winter months. The energy management system can ensure that this coincides with the cheapest times of the TOU tariff to minimise costs for the asset manager.

Where can find more information on how intelligent heating management solutions can work with time of use tariffs?

More information on how intelligent heating management solutions can work with Time of Use tariffs can be found in the SmarterDM white paper ‘Intelligent heating solutions – reducing carbon emissions and energy costs for hotels and student accommodation.’

SmarterDM is an innovative UK based software and hardware development company that delivers intuitive systems for asset holders to help monitor, report, and manage data in real time. 

If you'd like to learn more about the financial and sustainability benefits that a SmarterDM energy management system could bring to your asset, please contact us, and our expert team will be in touch to provide a free indicative energy saving calculation.