Study: Households in Germany could provide 100 TWh of flexibility in 2035

The planned electrification of the heating and transport sectors in Germany will bring not only a significant increase in electricity consumption, but also an opportunity to use flexible management of household electricity consumption. According to a study by Agora Energiewende, with appropriately designed dynamic electricity tariffs, the volume of flexible household electricity consumption could reach up to 100 terawatt-hours per year by 2035.

The ongoing transformation of Germany’s energy sector, involving a shift away from nuclear and coal power and a move to renewable energy sources, will require, among other things, sufficient volumes of dispatchable electricity generation and consumption to ensure that demand for electricity is met at all times.

To this end, plans are being prepared to build up to 24 GW of new gas-fired power plants. Some are expected to be capable of running entirely on hydrogen from the moment they enter service, while those that initially burn natural gas will have to be converted to hydrogen by 2035.

On the consumption side, households could help provide a significant volume of flexibility, according to a recently published study, thanks to the expected growth in heat pumps, home battery storage and electric vehicles.

Dynamic electricity tariffs are key

Researchers from Agora Energiewende estimate that, with appropriately designed dynamic electricity tariffs that give consumers sufficient incentive to manage their electricity consumption, the volume of dispatchable household electricity consumption could reach up to 100 TWh in 2035. That is equivalent to around 10% of Germany’s expected total electricity consumption that year.

“With automated electricity consumption management, more and more households will be able to influence their electricity bills. Households on dynamic tariffs will save around 600 euros a year and will also contribute to the success of the energy transition. Customers who are unable to manage their consumption will benefit from lower overall electricity costs and better use of the power system,” Agora Energiewende said.

According to the study, dynamic tariffs will give households an opportunity to reduce their electricity bills while also reducing the need to expand the power system and operate dispatchable power plants.

“These tariffs combine dynamic electricity prices with dynamic grid charges. Dynamic electricity prices show whether electricity is currently in short supply or in surplus. Dynamic grid charges, in turn, reflect current use of the distribution grid: charges are low when there is capacity available in the grid and high during periods of heavy loading,” Agora Energiewende added.