Whether you're managing or using charge points to fuel your EV lifestyle, highly volatile electricity prices are worsening life for both providers and consumers. The old-school fixed price per kWh setup, embraced by many, only works when prices are predictable and stable. But with this all-time high-volatility environment, a more flexible solution is needed.
In search of a solution that allows providers to tie their profits to the real-time price of electricity, and consumers to know exactly how much they will be paying thanks to trustworthy predictions, we’d like to introduce you to Monta’s spot pricing.
Put simply, spot pricing allows charge point owners and operators to set their prices to follow the live, hour-by-hour price of electricity, with a premium on top. The result? Drivers always get a fair price for their charging needs.
Fixed pricing should stay in the past; it erodes the transparency and fairness of the charging system and has a negative impact on the future of e-mobility. In a worst-case scenario, you’re either incurring losses or affecting customer trust by setting unfair prices for them.
Who benefits from this?
Everyone does. Public charge point operators who are selling electricity, housing associations who want to make sure their residents are paying a fair and correct price, companies sponsoring charge points looking to reimburse their employees properly, and private EV drivers who are sharing their charge points with the public.
Charge point operators
Charge point operators managing public charge points no longer have to deal with fluctuating electricity prices. They can rest assured that their pricing offering will cover the basic cost they have for electricity from now on.
Not only that, but with spot pricing, they’ll never undercharge when prices are high or overcharge when prices plummet. This will ultimately ensure that prices are never unfairly high, creating a much fairer marketplace.
As for EV drivers, with the current setup, they’re at risk of paying very high prices for charging their cars. When prices fluctuate wildly and only fixed pricing options are at their disposal, charge point operators and owners are forced to set very high prices to make sure to cover peak time prices.
This results in drivers that are unhappy with the charging experience, which erodes the trust, transparency, and fairness of the EV charging ecosystem, potentially hurting not just the businesses involved, but the whole industry's growth.
With a price tied directly to electricity prices, no matter the fluctuations, users can now know they're paying the fairest market price possible.
Sponsored Charge Point Owners
Owners of sponsored charge points, such as companies covering charging for employees, will never have to gamble with a fixed price to pay back users.
When employees were paid too little, the company had to reimburse them at a later point. When employees were paid too much, the overpaid price had to be registered as taxable income.
Now, businesses can rest assured that they can accurately reimburse their employees a fair amount, and avoid any accounting issues.
Finally, housing associations were forced to incur losses when all they wanted to do was give a fair charging experience to residents. Thanks to Monta’s spot pricing, they won’t have to worry about those losses anymore.
What is spot pricing?
The term ‘spot price’ means the current price of a good (in this case electricity) at a given time in a given place within the market.
Monta’s spot pricing feature allows operators to set their kWh price based on a live, hour-by-hour price that they’re paying themselves for electricity, and not on a static number that won’t reflect the real price.
Monta gets charge points’ locations, and defines what data-group the spot price will come from. Then with a simple calculation, operators will see the price that a charge will then be based on:
Price = spot-price rate + premium (fixed) AND/OR premium (percentage)
- Spot-price rate = the spot price for the area/location of the charge point on an hourly basis based on data from Nord Pool
- Premium (fixed) = the ability to add a fixed premium on top, e.g. delivery costs
- Premium (percentage) = the ability to add a percentage premium of the spot price on top, e.g. VAT
For example, let’s say that a charge session starts at 10:30 and ends at 11:30.
- 10 - 11 = 0,1 EUR/kWh
- 11 - 12 = 0,5 EUR/kWh
- 0,05 EUR/kWh
- 50% of spot price
Let's say that the user charges 10 kWh in the charge session
→ 5kWh in the 10-11 timeframe
→ 5kWh in the 11-12 timeframe
The charge session price will then be:
- 10:00 - 11:00 = (5kWh x 0,1 EUR(spot price)) + (5kWh x 0,05 EUR (premium fixed)) + (5kWh x (0,1 x 50%)) = 1 EUR
- 11:00 - 12:00 = (5kWh x 0,5 EUR(spot price)) + (5kWh x 0,05 EUR (premium fixed)) + (5kWh x (0,5 x 50%)) = 4 EUR
Charge session price = 5 EUR (1 EUR + 4 EUR)
Although the EV owner charged 5 kWh both between the 10:00 - 11:00 and 11:00 - 12:00 time intervals, they ended up paying 1 EUR for the first 5, and 4 EUR for the second 5.
What does this ultimately mean for operators and users?
It means that moving forward, operators can charge their users based on the spot price and the add-on premium of their choice – fixed, percentage, or both. Users will pay for the real-time price of electricity and then the profit margin that the operator has selected. This makes the transaction between provider and consumer fairer and more transparent.
Dynamic pricing based on the spot price isn't just a nice to have, it's a necessity.
Get started with Monta today to unlock Spot pricing for your charge point business.