Dynamic pricing (or repricing) is the process of automatically setting the prices of products and services based on various factors, such as market conditions, customer preferences, or competitor prices.
Depending on the volume of energy, Trading Companies shape their offers based on wholesale prices accepted in different calculation periods, which can be divided into three basic groups:
- fixed, applicable throughout the entire billing year, contracted on the Forward Market of Polish Power Exchange.
- variable based on the average periodic prices of the Day-Ahead Market, listed on Polish Power Exchange.
- variable based on hourly prices of the Day-Ahead Market, listed on Polish Power Exchange, known as dynamic pricing tariffs.
The planned broader implementation of contracts with dynamic pricing will allow for setting electrical energy prices for the end consumer based on hourly price listings on the Day-Ahead Market.
Advantages of dynamic pricing tariffs:
- they create the possibility of reducing costs for electrical energy consumers who can manage their energy consumption and adjust it to the current market price levels and flexibly adapt energy usage to price signals from the market.
- the widespread adoption of such contracts may positively impact the optimization of consumer energy costs and maintain market stability in the area of balancing energy supply and demand.
- this type of settlement system received a positive recommendation from the Council of European Energy Regulators because it allows for market-based balancing of demand and supply according to hourly energy prices,
- it creates a system of market incentives for activity within the demand-side management service based on the hourly demand profile,
- forecasting and managing hourly demand, based on price signals from the Day-Ahead Market, should provide added value compared to the current tariff group system.
The ability to store energy by the consumer will be crucial for the profitability of using contracts with dynamic pricing. This will allow for minimizing energy consumption from the grid during the so-called peak period. Moreover, in the case of prosumers, i.e., consumers actively participating in the market, smart meters will enable flexible adjustment of production and consumption levels to price fluctuations within a given time frame.
From August 24, 2024, the largest electrical energy suppliers in Poland will be required to offer energy purchases in this settlement model even to households
Sources:
- https://wysokienapiecie.pl/102207-taryfy-dynamiczne-jak-skorzystac-na-zmiennych-cenach-energii/
- https://zielona-energia.cire.pl/artykuly/serwis-informacyjny-cire-24/taryfa-dynamiczna-od-sierpnia
- https://www.gkpge.pl/dla-domu/strefa-klienta/aktualnosci/umowa-z-cena-dynamiczna-nowosc-dla-gospodarstw-domowych.-wkrotce-oferta-od-pge
If you have any questions or concerns regarding the above matter, please do not hesitate to contact our experts:
Piotr Włodawiec: wlodawiec[at]prokurent.com
Łukasz Moczydłowski: moczydlowski [at] prokurent.com
Paweł Wróblewski: 'p.wroblewski [at] elbudbis.pl
Authors:
Piotr Włodawiec – Attorney-at-law / Senior Partner
Łukasz Moczydłowski – Attorney-at-law / Senior Partner
Paweł Wróblewski – CEO ElbudBis
Relkonds
Material prepared in collaboration with:
