The contribution How do dynamic electricity tariffs work? by Beatrice Bode first appeared on Basic Thinking. You always stay up to date with our newsletter.
Most electricity tariffs have a fixed price per kilowatt hour – despite fluctuations on the electricity exchange. However, there are also flexible tariff options. We’ll tell you how dynamic electricity tariffs work and how you can use them.
The increase in electricity prices has provided many consumers in Germany with a financial challenge. The reason for this are the effects of the energy transition and various geopolitical crises.
Current studies assume that gross current consumption in Germany will increase to over 650 terawatt hours by 2030. If you want to reduce costs, you often decide to change tariffs. However, there is another way to save money.
What are dynamic electricity tariffs?
Last year committed that Federal Ministry of Economics and Climate (BMWK) Power providers to offer dynamic electricity tariffs from 2025. They are based on the principle that electricity prices adapt flexibly to the current availability and market situation.
The price is calculated every hour or quarterly on the basis of supply and demand. For example, if wind or solar energy is fed into the network, prices decrease. When all people switch on the TV at peak times, they climb.
The suppliers pass on the fluctuating prices in real time using dynamic electricity tariffs by reflecting the actual costs of energy generation. Consumers have the chance to benefit from the fluctuations by only using electricity if they are particularly cheap. The prerequisite: a smart meter.
Smart meter: How do dynamic electricity tariffs work?
Smart meters are intelligent electricity meters. They record electricity consumption every 15 minutes and send the data to network operators and electricity suppliers to enable a billing. They are intended to help consumers track their habits and deal with energy more consciously. Smart management systems and apps can continue to support saving electricity.
With an intelligent electricity meter, devices in the smart home can also be controlled – from the washing machine to the electric car. A so -called gateway in turn sends measurement data back and forth in the power grid. Consumption and production of the electricity can be coordinated.
Then smart meters are mandatory
By 2032, smart meters should largely be standard and replace traditional electricity meters. According to the digitization of the energy transition, consumers have already been entitled to one of the intelligent electricity meters since the beginning of 2025.
However, they are also mandatory for some. Anyone who has an annual electricity consumption of over 6,000 kilowatt hours or has a photovoltaic system with an output of more than seven kilowatts of peak must have a smart meter installed since 2025. Heat pump and wall box also fall under that LawBecause they are controllable consumption facilities.
In terms of pricing, dynamic tariffs are still similar. Because they too have a fixed monthly basic price. Only the actual consumption price is linked to the stock market price. The legal taxes, levies and network charges are also on the bill.
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The contribution How do dynamic electricity tariffs work? by Beatrice Bode first appeared on Basic Thinking. Follow us too Google News and Flipboard.
Dynamic electricity tariffs work by varying the price of electricity based on the demand and supply in the market. This means that the cost of electricity can change throughout the day, depending on factors such as peak usage times, renewable energy availability, and grid congestion.
For consumers, this can mean that electricity is cheaper during off-peak hours and more expensive during peak times. By incentivizing consumers to shift their electricity usage to times when it is cheaper, dynamic tariffs can help reduce overall energy consumption and improve grid reliability.
From a tech industry perspective, dynamic electricity tariffs can be facilitated through smart grid technology and smart meters, which allow for real-time monitoring and pricing of electricity usage. This creates opportunities for innovative energy management solutions, such as smart appliances and energy storage systems, to optimize electricity consumption and cost savings for consumers.
Overall, dynamic electricity tariffs are a promising tool for promoting energy efficiency and sustainability in the electricity sector, and the tech industry has a key role to play in enabling their implementation and adoption.
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