The missing link: Why Dynamic Pricing is Essential in the Switch to Clean Heating

BEUC commissioned a new study from LCP Delta to look at both the potential advantages and disadvantages of dynamic pricing contracts as well as a series of recommendations for policymakers to help unleash its full potential. The main findings include:

• Homes with a heat pump benefit greatly from dynamic pricing contracts. Those in Belgium, Spain and Italy who have a heat pump and switch to dynamic price tariffs can save between €460-€1,350 per year.
• Even when sticking to ‘static’ pricing, running a heat pump leads to lower energy bills. In Belgium, Italy and Spain, consumers can save between €170-€720 per year if they switch from a gas boiler to a heat pump.
• Consumers do not necessarily need to be equipped with sophisticated technologies such as smart and automated controls, or batteries to benefit from dynamic tariffs.
• The financial risks of using regular appliances during peak hours are limited, as are the risks of unpredictable pricing.
• The benefits of dynamic prices can vary significantly between countries. This is mostly attributable to differences in national taxation levels of electricity.

This study is based on energy prices from July 2021 to June 2023.