The move is designed to open the door to technology firms to offer their own gas and electricity pricing plans for British households, handing millions of families the opportunity to slash their bills by taking advantage of ‘time of day tariffs’ which rewards those who draw from the grid only at times of low demand.
Those who take advantage of such deals will see appliances such as TVs and washing machines deactivated remotely by their supplier during periods of peak demand, cutting the price of energy at the cost of convenience. On the flipside those who switch on washing machines, dishwashers and other goods during the busiest periods face paying more for the privilege as suppliers seek to iron out peaks and troughs in demand.
This will be made possible by the installation of smart meters capable of relaying data on household energy use to the provider.
Andy Burgess, associate partner at energy regulator Ofgem, commented: "We want time of day tariffs to be commonplace by 2020. We will make this happen by letting other types of firms, for example technology companies like Google or Amazon, to enter the sector and innovate.
"If they introduce time of day tariffs then energy companies will either have to change to keep up, or lose money."
Both Google and Amazon have previously expressed a desire to enter the energy sector but as yet have not offered any firm plans to offer the new tariffs.