Power tariffs – how they impact your electricity consumption and cost
Power tariffs affect how much you pay for electricity. Smart charging can lower costs and help avoid high power peaks.
Power tariffs – how they affect Your electricity consumption and cost
Power tariffs are becoming increasingly common as electricity grids need to handle higher loads, especially with more electric cars and electric heating in Swedish homes. But what exactly is a power tariff, and how does it affect your electricity cost? In this post, we clarify the concept and give you concrete examples of how it can work in practice.
What is a power tariff?
A power tariff is a pricing structure for the electricity grid fee based on the highest power (kW) you use during a certain period, usually an hour or half an hour, instead of just calculating the total amount of energy consumed (kWh). This means you pay not only for how much electricity you use but also for how much load you put on the grid at a specific time.
The purpose of power tariffs is to even out the load on the electricity grid and reduce the risk of overload. By rewarding customers who spread their electricity consumption over time, grid companies can avoid costly investments in capacity upgrades.
How do power tariffs work in practice?
If you have a power tariff, your highest power peak during a month is measured, and you pay a fee based on this peak. For example, it could be an hour when you use several electrical appliances simultaneously or charge your electric car.
Example: Anna lives in a house and charges her electric car at home. During one day, her electricity consumption is as follows:
Morning: Coffee maker and stove used simultaneously, power need about 3 kW. Afternoon: Electric car charging starts, power need 7 kW. Evening: Simultaneous use of washing machine, stove, and electric car charging, power need 12 kW.
With a power tariff, Anna’s monthly fee is based on the highest power, i.e., 12 kW. If she instead spreads out her electric car charging to times when other consumption is low, she can reduce her power peak and thus her fee.
Power tariffs and electric car charging
Electric car charging is one of the largest power peaks in many households. Many grid companies therefore offer special power tariffs or power fees for electric car charging. This can be an opportunity to reduce electricity costs through smart charging, for example, charging at night or with a charging box that can control the power.
Three Simple Tips to Reduce Power Peaks and Costs
- 1.
Reduce charging power – avoid charging faster than necessary
Most households do not need to use full 11 kW power for home charging. For most commuters, charging power of 6–8 kW overnight is sufficient. This provides the same amount of energy (kWh) but reduces power peaks, which both relieves the grid and lowers costs.
- 2.
Use load balancing – don’t let electric car charging and household appliances compete for power
When stove, heat pump, shower, and electric car charge simultaneously, the power can become very high and thus expensive. Load balancing automatically controls charging to adapt to the total load in the home, a very smart solution!
- 3.
Schedule charging – charge when the grid is less loaded
Many choose to charge their electric car between 5 and 8 pm, which creates load peaks in the grid. You don’t have to follow that trend. By setting charging to late evenings or nights, preferably combined with smart charging functions and spot price-based control, you can both reduce your cost and contribute to a more stable grid.
Summary
Power tariffs are an important tool to create a stable and sustainable electricity grid. By understanding how they work and adjusting your electricity consumption, you can contribute to a more efficient grid and at the same time reduce your costs. With increasing electrification, not least through electric cars, it becomes increasingly important to think about when and how we use electricity.
