energy tariffs: What's in a name?

Can't see the forest for the trees with all the different energy rates and why this matters to FlexiO?

Find out in this blog and choose the energy rate that suits you best.

The structure of your energy bill

Your energy bill consists of 3 components:

• The energy cost
• Net rates
• The taxes and fees

Net rates, taxes and charges are set by law. You have no choice in this. Your energy cost is strongly influenced by your energy tariff. You choose this yourself.

For an average family with a consumption of 3500 kWh per year, a digital meter with day and night regime takes about 56% of the total energy bill. This means that a large part of your energy bill is determined by your energy tariff choice.

The basics of the energy market

It is important to understand some basics first.

The energy price on the market is determined by supply and demand, which must always equal each other.

Energy used to be produced mainly by nuclear, gas and coal power plants whose production is very predictable and stable. Each of these energy sources has its own production cost. And typically because of this, the price of energy was low during the night and higher during the day when there is more demand and therefore the more expensive gas plants have to be used.

Today, there is much more renewable energy in the system. Of this, the production is variable according to the weather and the production cost is very low. If there is a lot of wind and sun, the energy cost will be low.

Below is the value of electricity on the wholesale market for any weekday in September in 2016, 2019 and 2023.

You can clearly see the impact of renewable energy on the wholesale price. When there is a lot of renewable energy, the price dives tremendously and vice versa.

Your energy supplier is going to buy part of the energy it has to supply you in advance and another part it is going to buy based on these wholesale prices.

3 types of energy tariffs

A fixed energy rate

A fixed rate is usually for a period of 1 or 3 years. This gives you certainty about the unit price you pay for your energy. If energy prices rise structurally, your supplier will have to buy some of the energy at a higher price. If energy prices fall, you as a consumer can cancel your energy contract. That way, your supplier has an excess of energy that it has to sell at lower prices. So your energy supplier takes all the risk for what can happen in the energy market. For this he charges a risk premium that is included in your fixed rate. So you pay a higher fixed price per kWh.

However, a fixed rate says nothing about how cheap or how expensive your energy is. If you had locked in a fixed rate just before the energy crisis in 2022, you did a good thing. If you took out a fixed rate in full crisis at the last minute when fixed tariffs were still being offered, you ended up doing a bad thing.

A variable energy rate

A dynamic energy tariff

In the graph below you can see the different energy tariffs offered by your energy supplier. Do you see the link to the wholesale market (see graph above)?

Choosing your energy rate is obviously a function of price, but also of how much security you want.

A dynamic rate combined with the smart control of FlexiO

If you opt for a dynamic energy tariff, then you can adjust your offtake and injection according to these different prices throughout the day: you use the power from your battery when prices are high and you may start injecting previously produced solar power. When prices are low, you store power from your solar installation in your battery and start taking power from the grid for your consumption. Of course, as a FlexiO owner, you don't have to do this yourself; FlexiO takes care of this entirely for you. This way you can focus on what you find important.

Did you know that an average FlexiO user with solar panels and battery can save up to 25 EUR/month extra saved over the past year thanks to smart control combined with a dynamic energy tariff compared to a user with a variable tariff? In the latter case, FlexiO can only respond to the capacity tariff, self-consumption and limited your energy tariff if you have a dual energy tariff.

And what about in the energy crisis year of 2022?

Indeed, prices for variable and dynamic contracts went up tremendously. But because there was a very large difference in hourly prices during the day, FlexiO was able to take full advantage of this.

How is this possible?

Take 28/08/2022 as an example. We are in the midst of the energy crisis and below you see wholesale market prices:

On this day, FlexiO charged the battery with solar electricity during the afternoon hours at about 0.05EUR/kWh. In the evening, not only was the home's consumption covered, but electricity from the battery could be sold to the grid at about 0.7EUR/kWh.

A 20 kWh battery brought EUR 14 in one evening.

For example, Wannes had the same final bill in 2022 as in 2023, thanks to smart control by FlexiO combined with a dynamic energy tariff.

I want a dynamic energy rate!

If you want a dynamic energy tariff, contact ENGIE, Bolt, EBEM, Octa+, Ecopower, Frank Energie or Eneco. They are currently the providers of dynamic energy tariffs.

So, now you're back on top of all the possible energy tariffs.

If you still have a question, please contact us. We will be happy to help you further!