The introduction of dynamic energy pricing has the potential to cut household bills, an energy expert has said. 

The cost of generating energy fluctuates remains significantly higher today than it was before Russia’s invasion of Ukraine in 2022. 

However, it has always been the case that energy is cheaper to generate at certain times of the day. 

Dynamic energy pricing will mean this is better reflected in people’s bills. 

“Most people will be on what we call a fixed tariff,” UCC’s Dr Paul Deane explained on The Claire Byrne Show. 

“That means that you're paying the same price for electricity all the time during the day, all the time during the week and all the time pretty much during the year. That gives you good predictability. 

“There's other types of plans out there as well called time of use or time of day, these are becoming a lot more popular. 

“This means that you're paying probably a little bit lower for your electricity at nighttime and a little bit higher.” 

Engineers on an offshore wind farm. Picture by: Alamy.com.

Some customers already avail of Time Of Use Tariffs and Dr Deane described this as “one step further”. 

“Instead of offering you three price times during the day, they're going to offer you 24 - so every hour,” he said. 

“So, the way it'll work in practice, or in theory, is that you will get a little notification from your supplier letting you know what the price of electricity will be tomorrow for each hour. 

“The idea there is then you look at that and say, ‘Oh my goodness, look, there's very cheap electricity in the morning. I'll do all the washing and the dishwasher at that time.’” 

For anyone hoping to use dynamic energy pricing to cut their bills, Dr Deane said they will need to “engage very carefully with this”. 

“The price of electricity will change every 24 hours,” he said. 

“That means that you've got to be really flexible; you've got to check every day and say, ‘Well, look, will I throw on the dishwasher in the morning or in the evening?’ 

“So, you need that engagement perspective, but you also need to be flexible.” 

A man installing a rooftop solar panel array. Picture by: Radharc Images / Alamy.

Personally, Dr Deane said he plans not to “rush into this myself” and is mindful that energy suppliers want to make a profit from their customers. 

“I'm going to let it bed in for a couple of months and see how it goes,” he said. 

“Look, the fundamental truism behind all this stuff, and not to sound cynical, but electricity suppliers don't want to sell you cheap electricity.

“They want to make profits and they will make sure that these plans, dynamic or not, will be profit returning for them.”

Main image: Bank notes next to a radiator. Picture by: Alamy.com.