DYNAMIC ELECTRICITY PRICE: WHAT'S BEHIND IT AND WHO BENEFITS?
The electricity market in Germany is changing. Renewable energies, digital power grids, and the desire for more flexibility are driving this transformation. Increasingly, there is talk of dynamic electricity pricing.
This refers to a tariff model in which the electricity price is adjusted hourly based on stock market prices – offering opportunities for those who want to consciously control their consumption.
What is a dynamic electricity price?
Unlike traditional electricity tariffs, where the price per kilowatt-hour (kWh) remains constant over a set period, dynamic electricity prices are based on the daily fluctuations of the electricity exchange. More specifically: the so-called day-ahead market of the European Power Exchange (EPEX Spot).
Here, an electricity price is set for each hour of the following day based on supply and demand. The price therefore changes hourly and can vary significantly over the course of the day – with differences of several cents per kilowatt-hour. Consumers with a dynamic tariff pay exactly this exchange price, plus a usually fixed basic fee from their provider.
Practical example: On a sunny and windy day with high green energy input, the electricity price can drop to just 5 cents per kWh at midday, while it may rise to 30 cents or more during evening peak hours.
How does a dynamic electricity tariff work?
A prerequisite for a dynamic electricity tariff is a smart electricity meter, known as a smart meter. It records electricity consumption in real time and automatically transmits the data to the energy supplier. This allows for precise billing based on how much electricity you used and when.
Providers typically make current and future electricity prices available via an app or online portal. Many of these tools also offer price forecasts for the coming hours or days. This way, you can shift your electricity consumption to cheaper times – and save money actively.
The process in detail:
- The electricity prices for each hour of the next day are set at the exchange the day before
- Your provider sends you these prices via the app
- You plan your consumption according to the price signals
- The smart meter measures your hourly consumption
- Billing is based on the actual consumption at the respective hourly prices
Advantages of dynamic electricity prices
Dynamic electricity tariffs offer several interesting benefits, especially for tech-savvy households or users who can flexibly manage their energy usage.
- Cost savings through time-shifted consumption: Use energy-intensive devices like washing machines, dishwashers, or EV chargers during low-price periods.
- Transparency: You can always view current electricity prices via the app or portal.
- Supporting the energy transition: When many consumers shift their usage to times with high wind and solar power input, it eases the grid and makes better use of green electricity.
- Automation potential: With smart home technology or energy management systems, processes like charging, heating, or washing can be automated and optimized.
Challenges and requirements
A dynamic electricity price offers many benefits but also requires certain conditions and active participation from consumers:
- Smart meter required: Hourly billing is not possible without a digital electricity meter.
- Price fluctuations require attention: Electricity prices can rise significantly at certain times. If you don’t adjust your usage, you risk higher costs.
- Technical understanding is helpful: It helps to understand the pricing model and, if necessary, use smart home technologies to control consumption flexibly.
Who benefits from a dynamic electricity tariff?
Not every household benefits equally from a dynamic electricity tariff. This model is especially worthwhile for:
- Households with high electricity consumption
- Users with controllable loads (e.g., wall box, heat pump, battery storage)
- Tech-savvy individuals interested in apps, smart meters, and automation
- People with flexible daily routines who can actively manage their consumption
Dynamic electricity tariffs: overview of developments and providers
Since 2025, energy providers in Germany are legally required to offer dynamic electricity tariffs. The aim is to boost competition and motivate consumers toward more flexible energy use. The market has grown rapidly since then. Currently, the following companies offer dynamic tariffs:
- Tibber
- Rabot Energy
- aWATTar
- Stromdao
- Discovergy (in cooperation with other providers)
It's worth comparing tariffs carefully, especially in terms of base fees, price structure, and the functionality of each app or platform.
Frequently asked questions about dynamic electricity pricing
What does dynamic electricity pricing mean?
Dynamic electricity pricing means the price of electricity changes hourly. It is based on the market price at the so-called day-ahead market of EPEX Spot and is set for each hour of the following day.
When is a dynamic electricity price worthwhile?
A dynamic electricity price is especially worthwhile if you can shift your electricity usage over time. Ideal candidates are households with electric vehicles, heat pumps, battery storage, or other controllable large appliances.
Which providers offer dynamic electricity tariffs?
Well-known providers of dynamic electricity tariffs include Tibber, Rabot Energy, aWATTar, Stromdao, and Discovergy. Since 2025, all major providers are required to offer such tariffs.
How much can you save?
Savings from dynamic electricity pricing vary greatly depending on consumption behavior and flexibility. Typical savings range from 10–30% of electricity costs.
Conclusion: Is a dynamic electricity tariff worth it?
Dynamic electricity tariffs offer real savings potential for tech-savvy households with flexible consumption. Those willing to engage with the technology and adapt their usage can save significantly and support the energy transition at the same time.
Important: Don’t just look at the electricity price – also consider the base fee, app quality, and customer service. For households with electric cars, heat pumps, or smart home technology, a dynamic electricity tariff can be a true alternative to traditional fixed-rate plans.