With the high energy prices, we are looking for ways to save on costs and energy consumption every day. One way to see if you can save immediately is to choose a different energy supplier or a different energy contract. Especially on the latter point, many options have been added. In more and more places, for example, you see dynamic electricity prices or variable energy prices, which can even differ per hour.
This offers particularly interesting opportunities for large consumers and people who want to charge an electric car at home as cheaply as possible. But what exactly is the dynamic electricity price situation and how can you benefit from this with an EV at the charger?
The pros and cons of dynamic electricity prices
To give you some clear insights into dynamic electricity prices and how interesting this can be for you, we have already listed the biggest advantages and disadvantages for you.
The disadvantages:
- 'Energy stress' because the price can change every hour and some consumers become obsessed with the price changes.
- Dynamic electricity prices can be much lower than standard rates, but also considerably higher. Incorrect timing means you pay more instead of less.
- Not all energy suppliers offer this option, which could mean a forced switch if you want to take advantage of it.
- Energy companies can charge an additional fee for a contract with dynamic electricity prices.
The benefits:
- Better balance in the energy market by matching supply and demand, which is becoming more important every day in this world.
- With the right timing, you can pay significantly less for your energy, which can mean significant savings every month.
- More logical form of pricing because you pay for the electricity at the actual price instead of at a predetermined electricity rate that is fixed by the energy company.
How do dynamic electricity prices actually work?
With a fixed energy contract, it is determined (well) in advance how much you pay per kWh. When the actual electricity prices change, you will not see this reflected in the electricity bill. If the price goes down, this is to the advantage of the energy company. If the price goes up, this is to your advantage. However, this setup is not really logical and fair, certainly not with the major price changes on the stock exchange these days.
When you choose dynamic energy prices, the price is not fixed in advance. You pay the actual exchange price of the electricity at the moment you use the electricity. Since you can always view the exchange price yourself (even somewhat in advance), you can respond to this fairly easily.
There is a side note that is often forgotten. The stock market price is the price for electricity, but without VAT and possible additional levies. So you always pay more than the actual net price per kWh on the stock market. The better energy companies have apps that allow you to see directly what you really pay per kWh, plus an average rate so that you can easily see how cheap (or expensive) the electricity is at that moment.
Impact on consumers
Dynamic energy contracts ensure that energy costs can be reduced considerably, but this does require planning. After all, the intention is that you can actually adjust your power consumption to changing power prices. In most cases, this means that you mainly have to use power at night (the older generation will undoubtedly still recognise the off-peak rates here).
With the increase in the number of smart meters and smart devices that can communicate with each other (and the meter cupboard), this is becoming increasingly easier. The impact of dynamic electricity prices is already clear to the average consumer, but at the same time will only increase in the coming period.
Impact on society
A point that is often overlooked is the fact that this is also a great advantage for society itself. The market price of electricity is determined by the balance of supply and demand (for convenience, we will ignore all levies and VAT). When there is hardly any supply and demand is high, the energy price is high. However, if there is a lot of supply and demand lags behind, the energy price drops.
Dynamic electricity prices are therefore a perfect means to help the market. When consumers can respond to an enormous supply of electricity at low demand by turning on the washing machine, charging the electric car or starting those heavy machines, the supply surplus is ideally absorbed. If supply lags behind demand after a few hours, prices per kWh will increase and consumption will be reduced. This could ensure that the gas-fired power stations will have a much quieter time, because they are mainly used to absorb peak moments in energy demand.
Not only does this mean a reduction in pressure on the energy network, it also ensures that electricity can be used more optimally and that green energy (without additional storage) can be used in a much better way.
The technology behind monitoring energy consumption
There are many ways to monitor your energy consumption yourself. Especially when you have a smart meter that can be linked to an app, it is a piece of cake. Many energy companies now also offer apps (or digital environments) where you can monitor your electricity consumption live. This is, especially in combination with dynamic electricity prices, a good way to better manage your energy consumption and thus respond to the lower rates.
Other ways to monitor energy consumption (even proactively) is to purchase smart devices and keep an eye on energy labels. When you walk around your house yourself and especially look at the consumption of the older refrigerator or washing machine, you will find more than enough possibilities to save (considerably) on your energy consumption.
The legislation
In Belgium, it has been decided that the largest energy suppliers must include a dynamic energy contract in their offer. The Belgian government calls dynamic electricity prices crucial in the energy transition and has therefore drawn up numerous rules, whereby it even obliges energy companies to include this form in their offer.
In the Netherlands too, there has been discussion about the New Energy Act, which should be a catalyst for the energy transition. When the proposal went to the Council of State and returned to Minister Jetten, he decided to follow a large number (but not all) of the recommendations. This also paves the way in the Netherlands for the mandatory inclusion of a dynamic energy contract by the larger energy companies. It is important to note that this is not a model contract or recommendation, but an option that must be actively chosen by the consumer.
Tips for the consumer
Adjusting consumption to a low energy price sounds nice, but will prove to be a huge challenge. A simple example: on hot days the gas price is often the lowest, but that does not mean that you are eager to start firing on gas at that moment when it is around 35 degrees outside.
At the same time, this offers a lot of flexibility, especially for people who do not have a 9-to-5 job and can actually (pro)actively adjust their electricity consumption to the electricity market prices. It is good to pay particular attention to the peak moments and avoid them. These are usually the weekend days, plus the times between 17:00 and 19:00 on weekdays. The lowest prices can be seen on the market between 12:00 and 16:00, as well as at night between midnight and six in the morning.
The most important tip that we as experts can give is to regularly look at the price changes and recognize patterns. Compare that to which devices in your home (or business) are the big consumers. These are the machines and devices that you want to run at maximum when the prices are the lowest.
At the same time, it is wise to remain the down-to-earth Dutchman. Do you actually not need electricity but is the price particularly low? Then remember that no electricity is still cheaper than electricity at a low rate. Earning money from negative electricity prices is almost impossible thanks to the levies and VAT (although this may change in the future).
An important point: flexible or variable energy contracts versus dynamic electricity prices
Flexible or variable contracts are very similar in name to the dynamic electricity prices discussed on this page, but they are absolutely not the same. With variable contracts (flexible contracts are identical), the prices are changed twice a year and this contract can be cancelled monthly. Although this does indeed provide a higher degree of flexibility, it is not the same as dynamic electricity prices. A dynamic energy contract has electricity prices that can change per hour and where the electricity price is clear one day in advance.
The relationship with home charging of your electric car
When it comes to high-volume consumers at home, the electric car is high on the list. The chances are almost 100% that this is the largest energy consumer while charging the battery. This means that you can get the most benefit from the dynamic electricity prices when charging your EV at home. You can do this manually by charging optimally (at full power) during the lowest rates, but there are also many charging stations for home use that can arrange this themselves. Keep in mind that you need a smart meter for this, because the charging station must be able to communicate with the meter.
While this is already rewarding and interesting for people who want to charge their electric car at home, it will become even more interesting in the near future. If developments in the field of directional charging continue at this pace, you will be able to fully charge your EV battery at the minimum rate and supply the power to the grid or use it yourself when electricity prices are high. This makes it the perfect time to see which smart charging station you need.
Do you want to know more about the possibilities or do you want to see together with an expert how you can optimally benefit from this by choosing the right charging station ? Send us a message so that we can help you personally right away.
