Variable tariffs

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Graphic representation of a three-tier tariff

Variable tariffs (Dynamic Pricing) are tariff models that combine different electricity price levels , depending on the time or load, in one tariff.

aims

Variable tariffs pursue the following goals:

Load profile modification

The modification of the usual load profile can take place long term (up to permanent), medium term or short term. Options for modifying the load profile are:

  • Peak load capping
  • Load lowering
  • Load increase
  • Shift in load profile
  • Low load increase
  • specific load management.

By means of load-variable tariffs, effects such as the economic optimization of the power plant park and the electricity network , the reaction to extraordinary market events, the integration of fluctuating generation and network protection can be generated.

Variable tariffs, which aim to modify the load profile, have an indirect energy-saving effect. For example, when the load is shifted from peak load to low load times, a more balanced power plant management and thus also energy use is the result.

Market participation

Market participation aims at more direct participation of private customers in the energy market . This is associated with both opportunities and risks inherent in the energy market. The electricity customer would then bear these risks.

Medium term
A medium-term commitment is achieved using tariff models that have time-variable tariffs with an indexed adjustment function. It usually extends over a period of months to years.
Short term
A short-term commitment, however, is achieved by means of time-variable tariffs in connection with frequent events. It usually lasts from days to weeks.

For the electricity supply company, the short- and medium-term targets mean that procurement risks are minimized, as the procurement costs can be passed on to private customers more quickly. For customers, however, these measures include increased market transparency and partial cost reductions.

Market participation as the primary objective can affect the load profile. However, since the focus of the energy providers within this objective is aimed at the market participation of the customers, influencing the load profile is only of secondary importance.

Customization

Individualization means the alignment of the tariff to the special needs of customer segments or to specific load profiles.

The tariff models for customization represent time-variable tariffs in combination with events, specific energy features and payment / contract features. The individualization of tariff models aims to increase customer loyalty and / or to win new customers, increase margins for energy supply companies and reduce costs for private customers.

Effectiveness of variable tariffs

Whether variable tariffs are efficient or whether they have any effect at all depends, among other things, on the customer. If customers do not take advantage of the tariff offers, which, for example, aim to shift load, the load will not shift in the targeted period. Numerous field experiments in various countries have shown that many household customers react to variable prices

On the other hand, the tariff models also have an impact on the effectiveness. If they represent offers that are not tailored to private customers, they will probably not accept them. (See customer segmentation for electricity tariffs). Depending on their consumption profile and price elasticity, customers can achieve different savings under different tariffs.

For commercial and industrial customers with higher electricity consumption, the potential is currently significantly higher than for private customers. If customers have a very flexible consumption, they can already adjust their electricity consumption on the basis of quarter-hourly electricity price signals and thus reduce their own electricity costs. An example of this are dikes that have to be drained regularly with the help of pumps. The pumps do not have to run through, but can postpone their electricity consumption to the hours and quarter hours when electricity is very cheap.

Variable tariffs in Germany

At the moment, the legal requirements in Germany only offer a limited scope for tariff modeling. German law provides that private and commercial customers with an energy consumption of less than 100,000 kWh / a must be supplied and billed according to the standard load profile H0 (see StromNVZ § 12 , paragraph 1). As a result, only time-variable tariffs are produced, which also have only a small price spread.

Variable tariffs have so far mainly been used in high and low tariff regulations (HT / NT). Simple two-tariff meters are used here. The variability of the tariffs is limited to two registers. With intelligent meters , the range of options for the tariff models increases. In the meantime, another price level (weekend) has found a response.

According to the German Energy Industry Act (EnWG) Section 40 (5), energy suppliers must be able to offer "particularly load-variable or time-of-day tariffs" by December 30, 2010. However, the legislature has not yet specified how “variable” these tariffs have to be.

literature

Web links

Individual evidence

  1. ↑ Ahmad Faruqui, Sanem Sergici, Cody Warner: Arcturus 2.0: A meta-analysis of time-varying rates for electricity. Ed .: Elsevier. 2017 ( sciencedirect.com ).
  2. ^ Frederik vom Scheidt, Philipp Staudt, Christof Weinhardt: Assessing the Economics of Residential Electricity Tariff Selection . Ed .: 2019 International Conference on Smart Energy Systems and Technologies. 2019, ISBN 978-1-72811-156-8 ( ieee.org ).
  3. ^ Scott P Burger, Christopher R Knittel, Ignacio J Pérez-Arriaga, Ian Schneider, Frederik Vom Scheidt: The efficiency and distributional effects of alternative residential electricity rate designs . Ed .: The Energy Journal. 2020, doi : 10.5547 / 01956574.41.1.sbur ( iaee.org ).
  4. ↑ Federal Ministry for Economic Affairs and Energy - White Book "An electricity market for the energy transition", p. 51 [1]
  5. ↑ Next Power Plants - Smart Dykes [2]