Imagine all the people

Countries with a high proportion of smart meters, electric vehicles and heat pumps have the most tariffs and services. In these markets, most suppliers offer their customers smart control of EV charging, often through a simple connection via their app.

Even in European countries where suppliers don’t offer consumers the tools to match EV charging or optimise their heat pump, there are apps, services and devices that can help match charging and heating to on-site solar production or dynamic energy prices on energy market platforms.

Some clear clusters can be identified when looking at the availability of smart tariffs and services. The Scandinavian countries (Norway, Sweden, Finland, Denmark) are leading the way. They have a high proportion of EVs (with home charging), heat pumps and smart meters. Here, many providers are offering rates and technologies to adapt EV charging and heating (heat pumps, hot water storage, home battery) to dynamic pricing, often across several countries. Often these services start with one input (dynamic pricing) but increasingly add others.

This technology then migrates south with increasing shares of EVs and completed smart meter rollouts, such as the Netherlands and Belgium (Flanders), and (without this completed rollout) Germany. This country, with its large EV fleet and rooftop solar penetration, also has a high number of tariffs and services available. The current focus, however, is on solar self-consumption, pending further smart meter roll-out. Nevertheless, many suppliers are well positioned for the announced mass roll-out of smart meters from 2025 (as well as the mandatory offer of dynamic tariffs for larger suppliers).

Traditional time-of-use tariffs with day/night differentiation are still the most common in other markets with a high share of smart meters, such as Italy, Spain and France. In France, however, the off-peak period in the summer is scheduled to change, which will add a seasonal dimension. Although the default (regulated) Spanish energy tariff is dynamic, there’s been little or no attention to the link with appliance automation for savings. Again, this is likely to change as EVs and heat pumps start to proliferate.

Smart control of heat pumps is an emerging market and as with EVs, it’s starting to gain ground first in countries with higher shares. Many of the energy suppliers with dynamic energy tariffs already offer smart EV charging, and a growing number in Scandinavian countries now also enable heat pump control. This avoids expensive peak hours on the grid. Specialised services, some with additional hardware that can be added to existing systems, offer smart heat pump control that takes into account not only energy prices, but also the thermal characteristics and solar radiation of the house, and efficiency in changing outdoor temperatures. As a result, services like Ngenic, Homely and Tado enable both energy and cost savings whilst increasing comfort.

Important to note: In 286 of the 447 tariffs and services, a dynamic price signal coming from energy markets is used. With dynamic energy tariffs, consumers have an incentive and advantage in shifting larger electrical loads, as the EV and heat pump are for many households.

Optimising for other dynamic inputs such as in-house solar generation, or the current grid mix, is a feature found in 188 smart energy products. In many countries there is a monetary incentive to use generation locally — ‘behind the meter,’ which can be easily stacked with other optimisation inputs.

Almost half of tariffs and services found (207) allow people to optimise for more than one factor related to electricity generation, the grid or their own generation. In its infancy, but likely to grow quickly depending on national regulatory implementations of energy sharing and renewable energy communities, are locally balanced supply and demand groups. These can be at building level, such as apartment blocks with rooftop solar and garage EV chargers, or within a geographically defined area, such as the French collective self-consumption within a renewable energy community, where supply and demand must balance within 15-minute intervals.

Combining multiple input factors into one tariff or offer increases the benefits for users, but especially for the energy system and the (local) power grid. By smartly charging their car, or smartly controlling their heat pump, users reduce not only their own costs, but costs for all energy system users, including those without EVs or heat pumps.

Dynamic inputs from the local electricity network are used only to a very limited extent (31 out of 447 tariffs and services). Dynamic adjustments based on national flexibility needs from a TSO (or indirectly, through an energy supplier’s portfolio) are three times more common (109).

Flexible consumption allows more renewable energy to be integrated, (local) networks to be used more efficiently, and avoiding peak moments reduces power costs for everyone.

Herein also lies a still very untapped potential for local grids: with an increasing proportion of vehicles electric and using a smart charging service, and increased electrification of heating, this distributed fleet can contribute to more efficient use of the local grid and avoid overloading due to consumption or local solar generation. In renewable energy communities, there can be significant synergies for the local grid and participating consumers by incorporating local grid signals.

Users who rely on public charging infrastructure have rarely been able to benefit from the flexibility of their charging processes. For example, the UK’s EV charging strategy includes extending the benefits of off-peak charging to users of on-street charging infrastructure, and several operators in the country already offer lower nighttime rates. In countries like Denmark and Lithuania, dynamic pricing at public charging points is becoming increasingly common. In other countries, such as the Netherlands and Germany, the first operators are introducing dynamic time-varying prices for some of their charging points. In a future article we’ll look at this in more detail.

Many of the smart services that control EVs, batteries, heat pumps and hot water tanks protect users from high prices through their automation, as in the case of a dynamic power contract. Automated smart control of the heat pump and smart EV charging prevents a lot of consumption during expensive hours, and home batteries even inject into the grid. Some of the services also work alongside existing fixed-price tariffs and offer ‘upsides-only’ by simply passing on savings or revenues these services have made on behalf of the customer. Removing price risk can appeal to a wider group of consumers to participate.

Most of the 246 tariffs are available to all consumers in the respective markets where they are available, usually with a smart meter as prerequisite (but that is no longer a barrier in most European countries). These tariffs then apply to the entire household consumption. There are also tariffs in the UK that specifically cover consumption for EV charging or a heat pump — a combination of a fixed low kWh price with smart control. A small proportion of tariffs require specific equipment and/or are only available in a bundle. This is particularly the case for ‘complete packages’ of solar panels, home battery and control of heat pump and/or EV.

How services perform is not always transparent and comparable: showing historical returns or guaranteeing savings in the future is almost absent in the still nascent market but will need more attention. This should facilitate users to switch to these ‘new’ tariff types and services as well. Another challenge for market actors, regulators and policymakers is to achieve interoperable and non-discriminatory solutions — how to take full advantage of smart control and pricing even with separate building blocks, and how to retain intelligence even when switching?

Interoperability — again a topic still in its infancy — is also relevant. Another hurdle is the investment required: the savings offered by an EV or heat pump compared to a fossil alternative are often only available after investing in their purchase. Combining flexibility services in a subscription or lease of mobility or heat
could be a welcome innovation. The intended long lifetime of many energy devices, such as inverters, heat pumps, home batteries and EV charging points, means that particular attention needs to be paid to the longevity of technical standards for control.

Stay tuned for more topical deep dives based on this data collection.

Here’s another interactive graphic, this time a bar chart that lets you break down the types of tariffs of services by country.

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