Millions of UK households could face Uber-style “surge pricing” on their energy bills amid a major change to the way smart meters operate.

Smart meters will automatically send updates on energy usage every 30 minutes, reports The Telegraph.

The new powers, granted by energy regulator Ofgem, will begin in May sparking fears suppliers could then use the enhanced information to start charging more during peak times.

The move comes after Ofgem announced the new energy bill price cap will rise by 54% in April.

It means energy prices will rise by £693 a year for millions of households after regulator Ofgem hiked the price cap on bills to £1,971.

The increase follows a 12% rise in October.

Ofgem announces major chance to smart meters amid energy bill increase

Ofgem said the change will be implemented on all new smart meters by 2025 but those who already have a smart meter won’t be affected unless they start a new contract.

Customers can currently ‘opt-in’ to sharing data with suppliers, but Ofgem said while data will be sent by default under new plans, consumers can opt-out if they do not wish to share their data.

A spokesperson for Ofgem told The Telegraph: “This major system upgrade is a significant milestone on Britain’s path to net zero."

They added: “It will enable a more efficient, flexible and greener energy system which will save billions of pounds per year on all consumers’ energy bills.

“Ofgem will work closely with industry to make sure it delivers this major upgrade while ensuring those in vulnerable circumstances remain protected.”