How to ensure that the consumer improves the security of the energy system and benefits from it?

Electricity prices in Poland may rise in the coming years due to huge investment needs in the energy sector. This would motivate us to save money. With the spread of smart metering, it will also be easier to count electricity costs.

So far, the importance of retail customers in the energy market has not been significant. - An individual energy consumer in Poland is still not perceived as a customer, and a petitioner, energy is after all a product. The discussion on the construction of new capacities - coal, nuclear and RES - lacks a consumer perspective to which the costs of new capacities will be transferred. It is necessary to discuss how to optimise the energy system and look for savings. With the technological progress, more and more widespread access to smart metering equipment, such opportunities are being created, new EU regulations will emerge in the coming years, which will create more privileges for energy consumers. - says Dr Joanna Mackowiak-Pandera, President of Forum Energii, that prepared a special report on this subject.

Households account for 85% of final consumers of energy in Poland. 14 million households spend 15 billion zlotys on energy, 1400 zlotys each. It is enough to relieve the Polish Power System during peak load hours by motivating customers accordingly. This is evidenced by the analysis of the behaviour of customers who pay a two-rate electricity tariff (G12).

- In Poland we have about 2 million active consumers who have a two-rate electricity tariff, which means that consumers pay different rates according to the time of a day. They adjust their energy consumption to its cost. This effect can be used to offload the Polish Power System during peak load hours - says dr Jan Rączka, senior advisor in the Regulatory Assistance Project and co-author of the latest study of the Forum Energii.

The development and spread of tariffs encouraging peak hour savings can increase the security of the energy system. At the most difficult times, customers will simply reduce their electricity consumption. According to the analysis, this could lead to savings of up to 200 MW in winter and 100 MW in summer. This is the equivalent of one popular power unit in Poland. In order for this to happen, it is necessary (in the short term) to:

• eliminate or move the low rate zone between 1 p.m. and 3 p.m. in two-part tariffs,
• create a new tariff that transfers consumption outside peak hours in winter, i.e. propose lower rates in the morning or night hours
• provide customers with access to hourly information on electricity consumption,
• promote automatic load control of equipment.

Such changes in customer behaviour are not altruism. They will simply choose more advantageous rates. They can at least program laundry during the hours when the rate is the most cost-effective. Relieving the energy system at peak times will increase its safety. - The analysis shows that the information has value for energy consumers. If hourly data on electricity consumption were available, the consumer could save from 35 to 160 PLN annually by choosing a more favourable tariff - adds Jan Rączka.

It is necessary to improve the quality of information on how much and when we use and, consequently, how we can reduce consumption. The bill should be easy to understand and provide reliable information on how much and for what households pay. Improving the efficiency of the retail market may limit the construction of at least one new power plant with a capacity of 200 MW, which saves over PLN 1 billion. - concludes Joanna Maćkowiak-Pandera.

The article is based on the publication of the Forum Energii entitled  "Transparency and economic efficiency of the retail market" by Jan Rączka and Edith Bayer.