The changes towards a greener economy mean that in particular the energy sector too is developing new business models. Behind flexible electricity tariffs is the aim to persuade consumers to use electricity outside peak times. However, it is often not clear how prices have been structured and how consumers - in view of their daily routines - are able to react. To discuss exactly these issues, the European Consumer Organisation (BEUC) invited guests to an exchange. The EU-wide interrelations on the energy market and the cross-country grids throw up some basic issues at European level. According to BEUC, three essential points for consumers regarding flexible electricity tariffs are of key importance:

1. Access to electricity a basic right

Independent of how digital the electricity market will become, it has to be ensured that all people will be able to get electricity and that they will also have access to low tariffs. In particular older people are no “digital natives” and often feel they cannot cope with current developments.  Hence, people without smart meters have to be granted access to low tariffs. The target of the EU’s 3rd Energy Package is that 80 % of European households will have been fitted with smart meters in 2020. Energy poverty is already a big problem in the EU and could be even made worse by rising costs for fix price tariffs.

2. Consumers in control

One of the great dangers of flexible electricity tariffs is that people with above-average energy consumption at peak times have to pay more because they - for example due to their working hours - are not in a position to shift their electricity consumption to “more favourable” time slots. In this context, reference is often made to pre-setting appliances or timers; however, this alone will not solve the problem and in addition requires new “smart” appliances. In addition, consumers must remain in control of their electricity consumption and be independent of digital systems, should it be necessary in emergencies.

3. Data protection

It is often very intransparent how consumers’ data is handled and how, if at all, consumers are informed about their rights. This is even more the case with regard to a smart meter, which has to be used for flexible electricity tariffs to record the exact time of the consumption. The information, recorded by the smart meter has to be transparent and accessible to consumers. Apart from that, it must also be ensured that consumers have the right to refuse the sharing of their data, without incurring any disadvantages.

Caution is necessary

Overall it has to be said that in practice the electricity consumption for most households can hardly be regulated in such a way, that they have an advantage or benefit because of a flexible tariff. The plan of the Commission, as stated in its Energy Package, to involve consumers to a greater degree, has little in common with the reality of life of most households. That is why it has to be ensured that people with time-independent tariffs are not worse off compared to those with flexible tariffs. The Study presented by BEUC shows how flexible electricity tariffs can work and where room for improvement exists. In particular the communication of prices is often too complex and technology is often not oriented towards consumers. On the contrary, too often the focus is on optimising the energy industry - at the expense of consumers. Hence, the AK insists that this has to change.

Apart from that, in the AK’s opinion the financial burden of the green change must not be offloaded to consumers. A reduction of the energy consumption only works hand in hand with an efficient energy policy, such as sanitations and heat insulations and the reduction of consumption in other sectors.  The electricity consumption by consumers is not the only fact, which has to be taken into consideration if the green change is to be achieved.

Further information:

AK Europa: “Energy poverty: time to act at European level”

AK Position Paper: EU-Energy Package “Clean Energy for All Europeans”: Directive on common rules for the internal market in electricity“

AK Position Paper: “A clean planet for all”

AK Position Paper: “Towards a sustainable Europe 2030”

AK Europa: “Parliament adopts important parts of the Energy Package”

BEUC Study: “Fit for the Consumer? Do’s and Don’ts of flexible energy contracts”