If you can handle your bill fluctuating with wholesale prices then Amber Electric might just be a way to end up paying a whole lot less for energy. This article is the first in a series profiling new electricity retailers that are set to shake up the energy industry.
If you are tired of the same old thing from the established energy retailers you might find the straight-up approach and bold ideas from these new players refreshing.Finally power prices get real
When electricity retailers set a usage rate they either need to “add a bit on top” to cover the risk of higher prices or buy a forward price agreement to hold the cost. As a result, customers end up paying a premium to have a consistent price. Amber do it differently. Instead customers pay the ‘real’ publicly available wholesale price on their real-time energy use, along with a flat $10 a month fee. Of course, like any market, wholesale electricity rates vary during the day and night as demand rises and falls.
You’ll need a smart meter to get in on Amber, so your usage rates and feed-in tariffs can be linked directly to actual wholesale electricity prices in half-hourly intervals. Along with the usage rate you’ll be up for daily supply charge that reflect the cost of being connected to the network. Amber offset your energy use with a choice of carbon neutral or renewable energy (aka GreenPower).
Ready to play the market?
The first question you might ask is what happens when the wholesale price spikes? At periods of high demand, the price of electricity increases at a rate that make Uber’s surge pricing look tame. The good news is that Amber protects customers with a maximum usage rate and a minimum feed-in tariff. This way you’ll know the most you’ll pay for usage and the minimum feed-in tariff you’ll receive.
The hardest thing is working out exactly how much this plan will cost in the future. Sure, you can be confident about the maximum you’ll pay – but what you won’t know is how much the price of energy will fall below this each day – and how much you’ll save down the track.
When it comes to picking where the market might be, past performance is no indicator of future prices. However as guide, if you looked at the price average in 2018 it ranged between
> 23 cents to 25 cents a kWh in Ausgrid (Sydney)
> 26 cents to 31 cents a kWh in South Australia.
The average range depends when you use power – with efficient households on the lower end. Still these are amongst the lowest anytime rates available. It’s important to keep in mind that every households pricing will vary, because their daily energy use is different along with the price though out the day.
The Snapshot
Where: Available in NSW (Ausgrid – Sydney, Central Coast, Hunter and Newcastle) & SA.
Where Next: Amber is set to expand to QLD, ACT, VIC, and the rest of NSW
What you’ll need: Smart meter required. Amber will arrange to install this.
Who’s it for: Innovators. Investors.Tech-savvy.
What’s the buzz: Real pricing model
Amber Electric are included in WATTever’s comparison if you are comparing electricity for the Ausgrid (Sydney) and SA Power networks. You’ll need to keep in mind that WATTever use Amber’s published maximum price – which is the most you will pay, for the purpose of comparison. Because of this you’ll find Amber’s plans well down the rank as a result. The size of potential savings are dependent on future market prices – which we don’t estimate.