A dynamic EV charging tariff is a pricing model in which the price of charging changes in response to electricity-market prices.
Unlike a fixed tariff, which applies the same price regardless of when a vehicle charges, a dynamic tariff can have different prices throughout the day. Prices are usually based on day-ahead or other frequently updated market data.
This means charging may cost less when electricity is widely available or demand is low, and more when market prices rise.
How dynamic EV charging tariffs work
Electricity-market prices change as supply and demand vary. For example, prices may fall when renewable generation is high or electricity demand is low. They may rise during periods of high demand or limited supply.
A dynamic tariff uses these changing prices to calculate what a driver pays for charging. Depending on the tariff, the operator may pass the market price directly to the driver or add a margin or other pricing rules.
Day-ahead prices are a common basis for dynamic tariffs. They set a price for each period of the following day and are normally published in advance. This gives drivers and smart charging systems time to identify lower-priced charging periods.
For example, a vehicle plugged in overnight could be scheduled to charge during the least expensive periods before it is needed in the morning.
Dynamic tariffs and smart charging
Dynamic tariffs work particularly well with smart charging.
Instead of starting immediately, a smart charging system can schedule a vehicle’s session around lower-priced periods. The system must still consider how much energy the vehicle needs and when it must be ready.
A dynamic tariff does not automatically reduce charging costs. The outcome depends on when the vehicle charges. A driver who charges during expensive periods may pay more than they would on a fixed tariff, while a flexible driver may benefit from lower market prices.
Dynamic tariffs versus time-of-use tariffs
Dynamic and time-of-use tariffs both change the price of charging depending on time, but the price is determined differently.
A time-of-use tariff follows a predefined schedule. For example, it may offer one fixed price overnight and another during daytime peak hours. These periods and prices are usually published well in advance.
A dynamic tariff follows changing electricity-market prices. New prices may be published every day for hourly or half-hourly periods, so the cheapest charging times can vary from one day to the next.
Put simply, time-of-use pricing follows a fixed calendar, while dynamic pricing follows the market.
Frequently asked questions
What is a dynamic EV charging tariff?
It is an EV charging tariff in which the price changes in response to electricity-market prices rather than remaining fixed or following a permanent peak and off-peak schedule.
How often can a dynamic EV charging price change?
It depends on the tariff and market. Prices may change hourly or every half hour, with the following day’s prices normally published in advance.
Are dynamic EV charging tariffs always cheaper?
No. They can reduce costs when charging is moved to lower-priced periods, but prices can also rise. The benefit depends on the driver’s flexibility and when charging takes place.
Is a dynamic EV charging tariff the same as a time-of-use tariff?
No. A time-of-use tariff follows fixed price periods. A dynamic tariff changes according to frequently updated electricity-market prices.
Was this helpful?