Dynamic tariffs in focus: insights from the FAME4ME workshop

We all know the feeling: you go to an event and don't expect anything at all. And then it becomes THE PARTY! That's exactly how we felt the day before yesterday at the FAME4ME expert workshop on dynamic tariffs. Fortunately, we were also the host of this event.

In the FAME4ME research project led by Christoph Kost from Fraunhofer ISE (Freiburg), we want to explore the question of how dynamic tariffs can be successfully designed together with EnBW, the AI Institute at the University of Würzburg and Countrol. To this end, we invited experts and interested parties from the energy sector to a workshop with30 participants at our premises in Cologne. The presentations were exciting, illuminated the topic from a wide variety of perspectives, the speakers had opinions and the panel enthusiastically joined in the discussion from the outset. It was lively, controversial, but always constructive and appreciative.

We have summarized the most interesting learnings from the presentations here:

1. Janina Ketterer from Octopus Energy

- Flexibility without complexity is the key to successful tariff offers.

- Octopus has shown a lot of creativity in its offers. The data-supported IT system behind it is self-made: Kraken.

- In the UK, the Saving Sessions (manual load shifting with more than 1 million participating Octopus customers) have generated more than 10 million pounds in rewards for them. The willingness to participate has tended to increase over time.

- In Germany, the biggest barrier is the much too slow and complex smart meter rollout. The UK market is much further ahead in terms of infrastructure.

2. Stefan Gruhler & Claudia Schimmel from EnBW

- The Group takes a much more cautious approach to the topic than the Challenger: the focus is clearly on checking and ensuring profitability.

- App first approach for B2C is chosen and for MAKE or BUY the EnBW team opts for MAKE for billing (EnPower(X)) and VISU (EnBW Zuhause App).

- A gMSB field test (365 users, high demand) is set up with Netze BW/Karlsruhe. Focus: homeowners. 50 receive a dynamic tariff.

- Billing is a huge challenge (“energy quantity” instead of “meter readings”) and also the complexity of the German rollout.

3. Mehmet Bolat from Verivox

- Dynamic tariffs from the perspective of a comparison portal. The number is growing from 2 tariffs (2020) to currently 17 (2024) - there should already be almost 90 today according to the law (over 100,000 customers are obliged to be suppliers).

- Thesis: either they do not exist or they are well hidden on the energy supply company websites so that the Verivox system cannot find them...

- Surprisingly low conversion rate of 1% - tariffs incomprehensible, complex and then there's the lack of smart meters (customers want to but can't due to a lack of infrastructure at home).

- Verivox is struggling with comparability, new sorting is needed here and the providers need to “educate” better: keyword smart meter. Risk communication?

- Nevertheless, Bolat sees potential and opportunities: cross-selling / combined products!

4. Ulrich Meyer from enytime.green

- Lichtblick man of the first hour, founder of the start-ups in which Stadtwerke Münster has invested, sees above all: great opportunities!

- Enthusiast, visionary and evangelist: Dynamic tariffs will completely change the market and a whole host of new business models will emerge.

- Renewables ensure that electricity can be produced at marginal costs close to zero: more and more market competitors, e.g. Tibber, EnPal, 1KOMMA5, Lichtblick, SpotmyEnergy, Ostrom, Rabot Charge.

- Once the customer with photovoltaics, charging station, heat pump, wallbox is gone, he stays away (lock-in effect) - 1200€ savings per household are quite something!

- The brave ones who go ahead and gain experience will be the winners. The hesitants will be marginalized...

5. Nikolaus Starzacher from Countrol

- Ex-Discovergy founder, active expert in competitive metering, sees major deficits in incentive regulation in the smart meter rollout - he sees a “lack of incentives among all stakeholders”.

- He sees EUR 3.1 billion in redispatch costs or 4% of unused electricity generation in 2023 as unnecessary “throwing away energy”.

- If the grid were not dumb, but digital and transparent, there would be a 5-15% reduction in consumption not only for grid operators, but also finally for consumers - also a waste of potential efficiency gains!

- German rollout status: 2% iMSYS and of these <10% smart (the rest a lot of TAF1 cases, i.e. 1 data point per year - where is the advantage over the analog Ferraris meter?)

- No incentives for the gMSB to be a “first mover” - 3 billion market potential/a with 52 million electricity meters and 60€ avg POG remain unused.

6. Frederik Pfister from Solarize

- Coming from the tenant electricity topic, today 100 customers from the housing industry, trade and energy suppliers.

- The SAP integration was created, they have mastered the topic of processing price time series intelligently and efficiently (core problem of billing with dynamic tariffs).

- The challenge is data gaps (missing 15 min values) by the metering point operator. Solution: Substitute value generation through interpolation on the basis of SLP profiles.

- Problem: Substitute value generation is NOT part of a normal ERP system.

- The problem is not so small in reality: affects <10% of the ¼ values, but >10% of the billing amount!!! - Billing is a key competence for the success of dynamic tariffs.

7. Peter Stratmann from the Federal Network Agency, Renewable Energies Division

- Clear edge on the subject of EEG funding, initially good, today in need of reform: hammock vs. market operation.

- Smart meter rollout: strongly suboptimal, how this is regulated in Germany.

- The EU wants the “active customer” as a target group - in Germany this is dormant due to a lack of transparency and participation.

- DSO processes for dynamic tariffs and direct marketing are not suitable for the mass market.

- BSI brakes must be removed from the game - the “need for security” is set far too high in international comparison.

- Plea for “value of electricity”.

8. Christoph Flath, AI professor at the Julius Maximilian University of Würzburg

- Core topic here too: Incentives! Consumer side must be activated.

- Today's topics were already researched in field trials 12 years ago - no noticeable progress in Germany.

- The “kWh” is an anachronism today.

- AI can help providers with planning, recommendations and automation. With AI, each customer can have their own price.

- BUT: Germany (not just research) suffers massively from a data availability problem.

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What did we take away from the workshop?

💡 There are still many unanswered questions on the supplier side: How and, above all, what is billed? What would be a profitable business case? How can transparency be created for customers? Do the SLPs still do justice to the dynamic tariffs?

💡 End users are no better off: dynamic tariffs are not very intuitive and are difficult to grasp. There is a lack of knowledge, technical tools (HEMS, iMSys,...) and much more.

💡 And comparison providers also face challenges: How can dynamic tariffs be listed? How can a tariff comparison be carried out with fluctuating electricity prices?

Afterwards, the speakers and the energy supplier representatives in attendance engaged in an intensive discussion about the will to make a change and the many system-related obstacles. In the end, it takes courage to try out something for which a business case can rarely be calculated at the beginning. The value of “accumulated experience” as a “long-term business case” component is often underestimated by controllers. “Life punishes those who come too late” also applies here. A big thank you to all participants, speakers, discussants and listeners for an exciting and inspiring meeting! Of course, a huge thank you to the project team, who ensured the smooth organization and hosting of the meeting. It was a lot of fun! We hope for a “new edition” in 2025 with new insights!

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