Night off-peak tariff for electricity becomes more and more illogical because of solar energy

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Most Dutch people pay an off-peak tariff for their electricity use at night and on weekends, but due to the rapid growth of solar power, this is becoming less and less logical. On the wholesale electricity market, the price of electricity is already lower during the day than at night, according to an analysis by NU.nl.

Energy suppliers buy their electricity on the so-called “spot market”, where different prices apply per hour of the day. In the first four months of this year, the price of a megawatt-hour between 10 a.m. and 5 p.m. was already lower than between 11 p.m. and 7 a.m., when many households pay off-peak rates. During the summer months, when much more solar energy is produced during the day, the price difference will likely increase sharply.

Some small energy suppliers already offer contracts that allow consumers to pay the “true” hourly price of electricity on the wholesale markets. It is therefore already cheaper for the customers of these companies to switch on the dryer or to charge the electric car during the day, but for most Dutch people it is still cheaper to use electricity at night.

It also encourages consumers to use electricity when less green electricity is available. At 2 a.m., more than 35% more CO2 is emitted to generate one kilowatt hour of electricity than at 2 p.m., according to data collected by energy expert Martien Visser for NU.nl.

This is because there is no solar energy available at night and therefore relatively more coal and gas-fired power plants are operating. “There is every reason to also apply the off-peak tariff in the afternoon”, explains Visser.

Intelligent systems must offer a solution

“This system is of course no longer logical,” concludes Annelies Huygen, professor of energy market planning at Utrecht University and TNO. She thinks people should be encouraged to store solar energy during the day in batteries or as heat in a boiler.

Smart systems should help consumers in the future automatically buy electricity at favorable times, says Huygen. For example, there are already apps for electric drivers that ensure that the car is charged at a favorable time. “A lot of these smart systems are being designed.”

Will we all have a “dynamic” energy contract in the future? And how do you prevent green energy from being “thrown away” on sunny afternoons? You can read this in our detailed article on NU+ Climate.

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