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In a spot price system you can use electricity when the price is higher than average.
by nawitus 3y ago
In a spot price system you can use electricity when the price is higher than average.
- ThatPlayer 3y agoYes, but when the majority of people cannot change their habits to match prices, you're just raising electricity rates.
- nawitus 3y agoI'm not expert in the system in California, but usually consumers are already paying the average spot price (plus some significant margin, which takes into consideration the demand profile of the consumer). Switching to spot pricing would not raise rates, and if consumer would adapt slightly to spot prices the average rate would actually decrease.
- wcoenen 3y agoI keep an eye on the day-ahead market prices (which determine the hourly prices for time of day contracts) here in Belgium. It turns out that the energy price charged by a traditional contract matches the peak price of a typical day, plus a healthy profit margin. This makes sense because most electricity is consumed when prices peak. So switching to a time of day contract does not actually raise your effective price per kWh, at least here in Belgium. Instead, it more or less keeps the same price for peak time, while giving you access to much cheaper energy off-peak.
- senkora 3y agoI don’t know the specifics of your contract, but I wanted to note that something similar bit a lot of Texas residents a few years ago: https://theconversation.com/whats-behind-15-000-electricity-bills-in-texas-155822 https://theconversation.com/whats-behind-15-000-electricity-... They were exposed to electricity spot prices and got bit hard when they spiked during a winter event that overloaded the grid.
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- nawitus 3y agoEurope has a max price and prices are determined on the previous day.