Households with spot-price electricity contracts were found to have significantly changed their power consumption by nearly 40 percent on days when electricity prices were at historic highs or lows.
Those were the findings of a joint study by the Finnish Environment Institute (Syke) and electricity company Väre.
Finland's electricity prices are relatively volatile, due to frequent changes in supply and demand.
The spot price of electricity hit a historic peak of more than two euros per kilowatt hour (kWh) in January of 2024, while a bidding error caused the hourly price to briefly bottom out at around a negative 50 cents in November 2023.
"On both days, the transmission grid company Fingrid instructed consumers to avoid unnecessary electricity consumption to ensure there was sufficient electricity," Syke's senior researcher Enni Ruokamo said in a press release on Tuesday.
The researchers found that households did not change their electricity consumption habits when prices fluctuated between zero and 28 cents per kWH. They also found — as anticipated — that the type of electricity contract households have directly affects how they react to price changes.
"On a day of high prices, those with [spot price] electricity contracts reduced their consumption by up to 38 percent. Those with hybrid contracts also reduced their consumption somewhat, by around seven percent. On days with lower electricity prices, only those with [spot price] contracts increased their consumption. Households with fixed-price contracts did not change their consumption on average on extreme price days," Ruokamo explained.
When the spot price peak was reached in January of last year, there was a good deal of speculation that consumers would soon switch to fixed-price contracts, but it turned out that relatively few actually did.
According to Väre's development director Antti Martikainen, households increasingly made the switch to spot-price contracts, and the consumers "seem to understand the features of the contracts they choose relatively well".
The joint study was funded by the Research Council of Finland. It was carried out during the winter months of 2023-2024. The study used data from 571 Väre customers with spot-price, hybrid or fixed-price electricity contracts.
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