Flexibility potential through dynamic electricity tariffs

Dynamic electricity tariffs link the unit price of electricity to time-varying prices on the wholesale market. Unlike static electricity tariffs with fixed unit charges, electricity costs can therefore fluctuate depending on the time at which electricity is consumed. For consumers with flexible assets, this creates opportunities to make economic use of existing flexibility and reduce energy costs. The level of potential savings depends in particular on the available flexibility and the respective system configuration.

Against this background, FfE supported Stadtwerke München (SWM) in evaluating the savings potential of dynamic electricity tariffs for typical customer profiles. Representative profiles for households, apartment buildings and commercial customers were modelled with different combinations of photovoltaic systems, heat pumps, electric vehicles and battery storage systems. These profiles were then analysed with regard to electricity costs and potential savings.

Methodology

• Definition of representative customer profiles for single-family homes, apartment buildings and commercial customers with different combinations of photovoltaics, heat pumps, battery storage systems and electric vehicles.
• Parameterisation and simulation of the customer profiles using the FfE optimisation model eFlame, taking technical boundary conditions into account.
• Taking current and future electricity price developments into account, the flexible assets of the customer profiles are optimised for two cases:
  • Ref: optimisation of the battery storage system and electric vehicle using a static electricity tariff as the reference case.
  • Opt: optimisation of all flexible assets (battery storage system, electric vehicle and heat pump) using a dynamic electricity tariff.
• Determination of the savings potential based on the difference between the two cases.

Results

The simulations show that dynamic electricity tariffs can unlock additional savings potential in all customer segments considered. In the analysed scenarios, savings in single-family homes, for example, range from €50 to €345 per year. The results are based on cost-optimal operation of the flexible assets and should be interpreted in light of the underlying modelling assumptions. Part of the savings for heat pumps is attributable to COP optimisation, where operation is shifted to periods with higher efficiency. In scenarios with battery storage, photovoltaic self-consumption is already optimised in the reference case, meaning that the reported savings are calculated relative to an operating strategy that has already been optimised. Potential costs associated with the direct marketing of electricity or the provision of flexibility services were not taken into account.

Figure 1 compares the annual electricity costs of different asset combinations for a single-family home, considering both the reference case with a static electricity tariff and price-optimized operation under a dynamic tariff. For the combination of photovoltaic system, heat pump, electric vehicle and battery storage system, the highest savings among the analysed configurations amount to €345/a in 2026. By 2035, both electricity costs and the additional savings for this combination decrease, with savings then amounting to €163/a. The declining savings potential up to 2035 is due to decreasing price spreads. For subsequent years after 2035, price spreads are expected to increase again, leading to higher revenue potential.