New 'dynamic pricing' tariff for electricity delayed after request from energy suppliers

The new tariff means customers can be told a day in advance when the best time would be to put on a wash, make dinner or do other energy intensive activities in the home to save money.

The introduction of a new "dynamic pricing” tariff for electricity customers has been delayed until next year, after some of the country’s main energy suppliers asked the regulator for an extension.

The new tariff – described as being suitable for “energy nerds” and not for all consumers by Bonkers.ie – will see the price of a household’s electricity change every half hour according to price fluctuations in the wholesale electricity market.

It means they can be told a day in advance when the best time would be to put on a wash, make dinner or do other energy intensive activities in the home to save money.

The Commission for Regulation of Utilities (CRU) had originally set a deadline of October 1 this year for all suppliers with 200,000 or more customers to offer this tariff to consumers. However, following requests from Electric Ireland, Energia and Prepay Power, it has agreed to extend the deadline to June 1, 2026.

The reasons for offering this tariff are that it will help consumers make “informed decisions” about how to use their electricity and also make room for renewable power on the national grid.

“This new tariff will provide household and business customers who have a smart meter with the opportunity to make cost savings on their electricity bills if they can move their use of electricity away from times of high prices to times when prices are lowest,” the regulator said.

Dynamic price tariffs will not suit most customers. They will work best for engaged customers who can actively move their electricity use to times of the day when there are lower prices.

It said it will also allow customers to reduce their emissions as they can also match their electricity use to a time when more renewable energy like wind is being generated.

The proposals include a price cap to ensure consumers don’t get penalised when wholesale electricity prices spike but concerns had been raised about how much consumers had engaged with smart meters to date.

In its response to the CRU’s consultation on the tariffs, Electric Ireland said it shouldn’t be introduced prematurely as customers “have a journey to go on in relation to smart meters”.

“This education piece should be undertaken centrally as dynamic tariffs are complex and will be challenging for agents to explain to customers and it is likely that dynamic tariffs will lead to an increase in queries and complaints,” it said.

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CRU said that the new deadline would provide suppliers with time to develop and launch customer awareness and education campaigns prior to the introduction of the dynamic tariffs.

It said that it would provide more time for customers to adapt and decreases the financial risk by beginning it in winter when wholesale prices are usually highest.

It added the suppliers stressed the "utmost importance of getting dynamic price tariffs off to a good start, thereby ensuring the best customer experience and avoiding poor uptake of this tariff in the longer term".