Dynamic tariffs: Best practices in the energy market

A recent study by LCP Delta, which examined 600 tariffs offered in Europe, found that 17% of them are dynamic, with these tariffs being popular mostly in the Nordic countries. However, dynamic tariffs remain risky for consumers, particularly after the recent energy crisis. According to CEER’s “Roadmap to 2025 Well-Functioning Retail Energy Markets” report, retailers may offer various pricing and billing options that can drive innovation and create customer benefits. Dynamic tariffs, for instance, can enable demand response, enhance digital services, and introduce more smart services.

Despite the risks, some energy retailers have successfully leveraged dynamic tariffs to offer innovative solutions to their customers. Below, we present examples from E.ON Sweden and enviaM, energy retailers in Sweden and Germany respectively. They have utilized dynamic tariff structures to provide customers with next level services, throughout the day, via their apps.

EnviaM's Happy Hour: more than just a good time

EnviaM offers a "Happy Hour" service—a sort of dynamic tariff proposition. The Happy Hour takes place daily during a specific time slot  when customers pay 50% less of the electricity they consume.

EnviaM, in collaboration with clever-PV, a home energy management provider, has enhanced the Happy Hour service, targeting specifically PV owners. The new service allows users with solar systems to consume surplus electricity themselves. The only prerequisite is for the PV household to have the iONA service. The Happy Hour service is powered by NET2GRID. The PV proposition allows users to optimize their consumption by utilizing PV power when in excess. The hourly electricity prices get aligned with the home energy management partners to facilitate the automated energy management action. At a later stage, iONA enables the collection of real-time meter readings which otherwise wouldn't be possible due to the old digital meters still existent in the German market. 

EnviaM has introduced another dynamic energy contract variant (called Mein Strom Vision) that shows the low and high cost moments of the next day in the iONA app. That way, customers having the Mein Strom Vision contract can get triggered to shift loads to cheaper moments of the day. All actual costs are shown in the iONA energy insights app based on the real-time data measurement.

E.ON Sweden’s Elna: Dynamic tarrifs and smart charging 

Dynamic tariffs offer the advantage of setting prices 24 hours in advance, allowing users to plan their energy interactions, such as electric vehicle (EV) charging. E.ON Sweden has capitalized on this, taking Elna energy insights service to the next level targeting residential customers who own EVs and there is home charging infrastructure. With Elna, customers can automatically charge their EVs during the lowest electricity price periods, through a home energy management partner integrated with the charging poles or car APIs, ensuring their vehicle is fully charged by the desired time. With Elna’s hardware offered by NET2GRID, households are able to monitor their energy savings in KW/h in their mobile app. 

Making energy consumption fun and informative

To enhance customer engagement and satisfaction, NET2GRID completes the puzzle for instant gratification in all these energy retail dynamic tariff programs. After participating in a dynamic tariff action, users can check the energy consumption and cost savings achieved on their app. This is presented in a user-friendly and visually-engaging manner within the utility app. This approach not only makes energy management more engaging but also it educates users about their consumption patterns and the benefits of dynamic tariffs.

By turning energy savings into a game, NET2GRID helps completing the customer engagement journeys where users can be more proactive in their energy consumption habits, ultimately leading to greater savings and a more efficient energy market.

Embracing the future of energy

Dynamic tariffs present significant opportunities in both European and US markets, provided they are coupled with actionable solutions. While dynamic pricing alone exposes customers to risks, especially post-energy crisis, integrated actions can offer substantial value. By promoting flexibility and demand response, dynamic tariffs can shift the mindset towards "getting paid to consume," making the energy market more responsive and beneficial for end-users and energy companies as well.