Time of Use Tariffs: Time is Money

Time of Use (ToU) tariffs incentivize consumers to shift their loads to off peak periods and thus reduce the strain on the grid and increase the share of renewables.

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Executive summary

Time-of-Use tariffs are here to stay

01

The mismatch between electricity demand and supply is growing with the increasing share of intermittent renewable energies.

02

The volume of flexible loads increases as EVs become the norm and more and more households have batteries installed.

03

With the advent of automatic Home Energy Management Systems (HEMS) loads can be shifted without compromising on comfort.

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Growing mismatch between supply and demand

The rising adoption of intermittent renewable energy in recent years has led to an increasing mismatch between electricity demand and supply.

Number of hours with negative wholesale electricity prices in Europe by year

The savings potential is huge

Within the course of a single day, electricity prices are subject to significant fluctuations. As can be seen in the chart on the right, on April 22 2019 the price of one MWh in Germany varied between €25 and -€80. With variable prices and shiftable loads, consumers could have benefitted from these price fluctuations.

Wholesale price €/MWh in Germany on 22 April 2019 by hour

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