Like a static electricity tariff, a dynamic electricity tariff (section 3 para 31d EnWG) is made up of a monthly base price and an energy-based price per kilowatt hour consumed. The base price covers the fixed costs for the power connection and the meter, while the energy-based price comprises variable costs for energy procurement, distribution and margin, network tariffs and taxes, levies and surcharges.

Dynamic tariffs are different in that the procurement costs included in the energy-based price are directly linked to the wholesale price on the European Power Exchange spot market (EPEX Spot). This means that any fluctuations in these wholesale prices are passed on directly to final customers. This in turn opens up the opportunity for customers to adjust their electricity consumption flexibly in response to current market prices.

While the level of surcharges, taxes, network tariffs and levies is reported in the annual monitoring surveys, the procurement costs are calculated on the basis of a typical standard load profile (SLP) customer’s consumption and the day-ahead prices. However, as the costs are modelled on the basis of the standardised SLP, adjustments to consumption in response to actual price signals on the day-ahead market are not taken into account. In practice, flexible adjustments to consumption could bring down the electricity price to be paid by a final customer. Information on other cost components, such as procuring guarantees of origin or monthly service charges, is also collected in the monitoring. The “modelled procurement costs & distribution/margin” component is made up of the modelled procurement costs, other procurement costs and the service charge.