Electricity Spot Pricing: What You Need To Know

What is a spot price? In simple terms, this is the current market price of electricity.The only person who can provide you with this is the pricing manager. Research has been done about this topic made by different consumer sites, as well as by NVE (Norway’s Water Resources and Energy Directorate). Research shows that most people pay too much for the power.

Most of the Norwegian homes, we’re talking about half of the households here, who pay for high electricity prices. The total loss for these consumers is about one billion dollars a year.  Again, one billion dollars! It means that many people have a lot of money to save by simply changing their supplier that offers less expensive electricity prices.

Why Are We Paying Too  Much For Power

That’s a fact. People pay too much for the power even in other countries. Why? One reason is that they have chosen agreements that focus on a fixed price on the stream.This means that the supplier takes risk of ensuring that he will deliver the power at a fixed price, all throughout the year, or as long as the contract period lasts.

The difference with a fixed price agreement is, compared to a spot price agreement on power, accounts for a large part of the lost billion that NVE reports about.  If you choose a spot price agreement, then you will earn eventually. However, you are not insured against sudden changes in the electricity price. One might expect to pay more for the power in the winter when there is a greater demand for electricity than if a fixed price agreement had been reached.

It is also not guaranteed that if it does not rain too much during a summer period or if snowmelt on the mountainside in Western Norway would not be possible that your electricity bills won’t go up. The risk is moderate and you save money if you take it.

 Keep In Mind When Choosing A Spot Rate Deal.

If you decide to choose a supplier that offers lower power prices, you may expect to be contacted after a couple of weeks with a deal that would be pleasing to your ears, where the seller of the given company will try to make you change your appointment to another form of agreement that the company also offers.  You need to make sure that “insurance” or “increased security” are taken into use. Remember that there are some strict restrictions on the marketing of power agreements in Norway, which exclude wider marketing. However, it does not exclude “advisory service conversations” with customers.

Since spot prices have been very popular with consumers lately, more are trying to tame the term for marketing purposes. These kind of spot prices are usually unsafe which are based on the daily price where it is at its highest and calculates your consumption on the basis of this. This will only benefit the company. They earn, since most private individuals do not use the most of their own electricity during the daytime, but rather in the afternoon and evening, when businesses and shops are closed.

To learn more about electricity spot pricing just visit, https://forbrukeretaten.no.

 

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