Spot market electricity is the only right choice for a cool-headed investor who tolerates volatility!
Electricity prices fluctuate like meme coin prices, but in the long run, spot market electricity is 100% likely to be the cheapest electricity contract, regardless of the home’s electricity consumption and heating method. Essentially, all other contract types are speculation on electricity price development or an insurance for faint-hearted paper hands against volatility🤠
So, if you can’t predict weather conditions, electricity consumption, and production in the electricity markets from a crystal ball, spend just 15 minutes every few months comparing the cheapest spot market electricity contracts. Searching for the cheapest fixed-price contract and speculating on what time of year to acquire one is a waste of time.
If spot market electricity is combined with the optimization of major consumption sources (heating, domestic hot water heating, and sauna), spot market electricity becomes even more attractive. Optimizing other minor appliances or lights has very little impact on overall costs and unnecessarily complicates daily life.
We have a large electrically heated detached house (just under 200m2) with an air source heat pump (ILP), a baking oven, and a fireplace as additional heat sources. I have invested approximately 600-700 € in optimization in the form of relays, thermostats, and electrician’s work.
Optimization is controlled by an open-source Home Assistant server and operating system. For example, the hot water tank is switched on only for the four cheapest hours of the day. For instance, this allows about 10 kWh of daily consumption to be directed to the cheapest hours.
Floor heating is also controlled on the same principle. In wet rooms, a more constant temperature is maintained due to daily use, but elsewhere, greater variation is allowed, enabling heating, for example, only during the 2-8 cheapest hours of the day, depending on the outdoor temperature. The ILP, on the other hand, operates quite steadily as it is the most efficient heat source in the house. Room-specific electric radiators are practically only on if the ILP breaks down.
Additionally, for longer periods of absence, the temperature in all rooms is lowered to 16-18 degrees Celsius. The temperature can be raised remotely to a suitable level before arriving home. Optimization also achieves significant savings in electricity transmission, as total electricity consumption can decrease by 15-30% annually, depending on previous consumption habits and the condition of the control system. For example, old broken thermostats waste a huge amount of energy.
Ready-made solutions for optimization are also available on the market if you’re not interested in building your own system and coding the controls. However, artificial intelligence can do this too nowadays.
It must be admitted, of course, that a baking oven and a fireplace make life easier with spot market electricity, as they can be used extensively during severe frosts when the ILP efficiency is low or electricity is particularly expensive. Even without the option of wood heating, I would still choose spot market electricity, and in extreme situations, I would lower the temperature and put on a wool sweater and socks. In the long run, there will be a balanced mix of mild and harsh winters, so an occasional expensive month is just that volatility that simply needs to be tolerated.
Aalto energia Oy
