Save costs, protect the climate

Flexible green electricity tariffs from GP JOULE

Save costs, protect the climate


GP JOULE’s flexible green electricity tariff offers industrial and commercial enterprises an incentive to use electricity specifically when it is particularly cheap. This also serves climate protection – because low prices mean that a lot of wind and solar power is available. Households and small businesses will soon also be able to benefit, explains Dr Fabian Sösemann from GP JOULE.  

GP JOULE is a project developer, energy producer, plant operator, direct marketer – and for a few months now, also a supplier. Why is that?

At GP JOULE, we are committed to driving forward the transformation of the energy system with all our might in line with our vision of “100 % renewable energy for all”. This also includes starting on the demand side. This is because consumption must increasingly be aligned with generation as wind and solar energy continue to expand. We provide a strong incentive for this with our electricity tariffs.

What exactly do you offer your customers?

Our “spot” tariff now targets industrial and commercial enterprises with RLM meters, a metering system for large consumers who want to benefit from the dynamics in day-ahead electricity trading. It is a green electricity tariff tracking what is happening on the spot market with hourly precision. Customers find out the day before what a kilowatt hour of electricity will cost at what time. They can then allocate their consumption to the hours with advantageous electricity prices – significantly reducing their energy costs. At the same time, they contribute to the energy transition and climate protection, as prices on the spot market are always low when a lot of wind and solar power is fed into the grid.

Many companies produce continuously. How can they shift their consumption?

There are countless possibilities. For example, you can use heat pumps to generate stocks of heat when electricity prices are low and store this in the form of hot water. Electric cars and vans, forklifts and battery-powered tools also offer enormous potential: these can be deliberately charged during the hours when is cheap. And there are also many possibilities for shifting demand in the production processes themselves, for example in the thermal or mechanical processing of raw materials and other materials.

However, dynamic prices also entail a cost risk for companies.

Logically, there is greater price risk than with fixed-price tariffs. However, the risk remains manageable if the market moves sideways. And let’s not forget: customers save themselves the risk premium that is priced into fixed-price tariffs. Suppliers hedge against price fluctuations on the electricity exchange with this premium. This cost component makes fixed-price tariffs noticeably more expensive. Eliminating the risk premium alone makes our “spot” tariff very attractive for companies – even if they have no interest at all in shifting part of their consumption to times of low electricity prices.

Does GP JOULE itself also offer fixed-price tariffs for companies?

Yes, this is our “base” tariff. In this way, businesses secure a comparatively low price per kilowatt hour, which is fixed for 12 or 24 months. This offers them maximum security and predictability of costs. Some companies have preferred the fixedprice offer over variable tariffs in view of turbulence on the electricity market in the recent past. But now, in calmer times, they see the charm of the flexible model. Many of them now want to try this out, some even without shifting their demand, in order to get some experience of it – and not least to benefit from eliminating the risk premium.

Households also have opportunities to shift their electricity consumption demand. Do you offer them a flexible tariff as well?

We will do this from the middle of this year, for private consumers as well as small commercial enterprises. Customers who have a heat pump or a wall box for electric cars in particular can reduce their electricity costs enormously. In some cases, this even brings more financial benefits to the bottom line than installing a photovoltaic system for self-consumption – although, of course, the best option is to combine photovoltaics and a flexible electricity tariff.

However, private consumers also incur costs as they need a smart meter for the tariff.

Yes, that’s right. However, the federal government recently presented a draft law that limits the cost of a smart meter to 20 euros per year. This makes them no more expensive than the digital electricity meters that are currently being installed in many detached houses and apartment buildings. And another thing: at 20 euros for a smart meter, the costs are so low that the dynamic tariff is even worthwhile if a customer does not shift their demand. So, the “spot” tariff for households with a wall box or heat pump is beneficial, even with the current, still somewhat higher, smart meter fees.

Consumers have been used to fixed electricity prices for decades; they find security in them. Do you really think they will go for flexible tariffs?

The question is quickly answered if you show them what they would have saved with a dynamic tariff based on their last electricity bill, even before shifting their demand. That convinces them immediately! But there is another strong argument: customers contribute to climate protection if they organise their consumption in such a way that they use a lot of wind and solar power. For example, if wind and solar power plants in the north are switched off due to insufficient grid capacities, fossil power plants in the south have to step in to keep the total amount of electricity in the grid stable.

Where does the electricity that consumers buy from GP JOULE actually come from?

We are building our power generation portfolio in parallel with our supply portfolio. The aim is to offer regional supply structures throughout Germany. In doing so, we will generate and supply as much electricity as possible in the same region. No guarantees of origin can be issued for wind and photovoltaic plants that receive subsidies. This is where what is known as the double marketing ban applies. Fortunately though, we already have the first generation plants in our portfolio that do not receive any subsidies. We can then clearly identify the origin of the electricity. In addition, we purchase green electricity if our renewable plants are unable to meet demand.

Last but not least: the electricity market is so diverse – why do we need yet another supplier?

Is it really? No, not really, because so far there are only very, very few tariffs that actually are advancing the energy transition. In other words, tariffs that provide incentives for flexibility; that help to bring generation and consumption into line. We are driven to create an energy system with 100-percent renewables. We need dynamic tariffs for this. There is little coming over from the established suppliers – that’s why we are doing it ourselves!

Dr Fabian Sösemann

is Managing Director of GP JOULE Plus GmbH, the business unit for smart energy products at GP JOULE. Prior to that, he was Head of Energy/Public Affairs at GP JOULE. Fabian Sösemann worked in the EEG (Renewable Energy Sources Act) department of the German Federal Government during his doctorate in law, later as a lawyer in the energy industry and in power purchasing (wind and photovoltaics) at one of the first full-service green energy providers before joining GP JOULE in 2016.