1705673726
European countries are switching to renewable electricity sources such as solar and wind energy on a large scale. In October 2023, the Czech Republic published a new climate and energy plan in which it aims to build capacity to obtain up to 60% of electricity from renewable sources by 2030. This is almost five times higher than in 2022. The transformation of the Czech energy mix brings new challenges and opportunities that are already impacting households themselves.
Renewable resources have an undeniable advantage. When the sun is shining and the wind is blowing, electricity production is very cheap. However, a challenging situation for distributors and suppliers arises when two events coincide in time: there is little electricity available (e.g. due to calm winds and cloudy skies) and the demand for electricity is high, which typically occurs on weekdays when people are after Return home from work.
Power sources for the Czech Republic in the coming years, Green…
This problem will only increase with the increasing electrification of the Czech Republic, the emergence of electric cars and the inadequacy of the electrical infrastructure. The newly planned tariffs are intended to motivate consumers to spread their consumption over time and to relieve the load on the network during peak periods when the network is most vulnerable to failures.
What will the new electricity tariffs look like?
From 2024, most energy suppliers will be preparing tariffs that respond to the fluctuating electricity supply on the network. These ensure lower prices at times when there is a surplus of electricity on the grid and, conversely, higher prices at peak times when demand is high. Intelligent electricity meters, which energy suppliers will install in households from the new year, enable hourly consumption measurement.
Households are already familiar with the so-called high and low tariffs, but the lower rate only applies to selected types of devices, such as an electric boiler, a boiler or an electric car. The new tariffs cover the entire electricity consumption of a household. This year we will already come across so-called static tariffs, which always set a higher tariff for the same time (e.g. on weekdays from 5 p.m. to 7 p.m.) and a lower tariff at other times. With so-called dynamic or spot tariffs, the price can change several times a day, depending on factors such as current grid load or the availability of energy from renewable sources. Dynamic tariffs offer households greater opportunity to save while planning their own consumption more thoroughly.
In addition to static and dynamic tariffs, Czech households are likely to come across other programs and products based on foreign initiatives. In England, for example, last winter energy suppliers asked households to voluntarily reduce consumption during the two-hour zone the following day. In return for participation, households received a reward, usually in the form of a small discount on electricity. More than 1.6 million households and businesses answered the call, saving a total of 3,300 MWh – enough to meet the hourly consumption of 10 million UK households.
Canadian utility Hydro One, for example, is testing a program for customers with a smart thermostat. These customers can opt for the Canadian utility to remotely reduce the output of their heating for two hours during times when the grid is particularly busy. The reward for participation in this program is a contribution towards the purchase of a smart thermostat and a financial bonus that the provider deducts from the consumer’s electricity bill.
Which households can save with the new tariffs and who will pay more?
All new tariffs and programs are based on the same principle: If you can be flexible with your electricity consumption, you save. Smart meters promise households more accurate monitoring of their consumption and a better overview of when the household pays the most for electricity.
There are many ways to achieve flexibility and reduce your electricity bill. One option is to postpone the start of appliances such as washers, dryers and washers until a time when electricity is cheaper. Households can also set boiler preheating and household preheating for off-peak times. Smart thermostats can help with optimal preheating. In the future, there will be more and more intelligent devices with the so-called Home Energy Management System, which allows the consumer to set the desired level of comfort and savings via the application. The smart system then takes over monitoring the current electricity tariffs and controlling consumption in the household.
Photovoltaics combined with battery storage promise even more flexible consumption. A household with solar panels can store the electricity generated in a battery to use it at peak times instead of from the grid, or to resell it cheaply to other consumers using the energy community model. An electric vehicle can also act as a source of energy that the household feeds into its energy storage during off-peak hours.
Without flexible consumers, the Czech Republic cannot manage the energy transition
The ability of households and businesses to flexibly adjust their electricity consumption is crucial to the stability and security of the energy network. Many companies already monitor energy prices and adjust their consumption to save on operating costs. We should expect a similar development in budgets in the coming years. How quickly this happens depends on the interaction between consumers, energy suppliers and regulators.
An important step for consumers is to make optimal use of government funding to increase household energy self-sufficiency. By investing in home insulation and technology to better respond to fluctuating energy market prices, consumers can best prepare for a changing electricity market.
Responsibility of suppliers and the state
However, how successful the new tariffs and programs are depends largely on the energy suppliers. Tariffs and bonuses for night-time electricity must be attractive, simple and intuitive enough to motivate households to switch to new tariffs. Abroad, we can come across a number of benefits that energy suppliers offer to flexible consumers: from significant discounts on smart thermostats to additional discounts on the bill for successfully reducing consumption during peak periods. The British provider Octopus Energy, on the other hand, values maximum simplicity for consumers. It helps households automate consumption management as much as possible, so they don’t have to worry about monitoring current electricity prices. Customers simply follow the graphs in the mobile application to see how much they saved on which day thanks to the automation.
The providers are also responsible for communicating the new tariffs to the public. In connection with the new tariffs, households will be able to gain access to modern technologies, save money, reduce their impact on the environment and better understand their consumption. The new tariffs can also be a source of fun and competition – in the UK, for example, many consumers have taken part in reducing their peak consumption as a fun challenge. The extent to which households are aware of the advantages of the new tariffs depends primarily on the communication from energy suppliers.
Last but not least, regulatory authorities and state administrative authorities have an influence on the success of new tariffs. In the interest of energy security, households should be activated through communication campaigns, support programs and regulatory measures to participate as best as possible in new incentives on the market and to use innovations in connection with the energy transition. And not just among wealthy households, but also among low-income and socially disadvantaged sections of society.
The author of the article is Ondřej Kácha, a behavioral economist from Green Dock
#households #pay #significantly #electricity #flexible #pay #cheaper #price