Now and then spot prices spike. It happens.
And when it does, things tend to get a bit crazy here at Flick HQ. Our phones start ringing. Facebook erupts. Twitter-sphere goes ballistic. Everyone wants to know what’s happening, how long it will last, and even whether they should shut their house down at the mains.
But we reassure everyone not to panic: we explain that spikes happen rarely, that prices are rarely finalised at the astronomical heights the market is showing, and that the net result on their bill will probably be less than the equivalent of a cup of coffee. All of which has been proven true time and time again.
But, of course, it’s easy for us, who’ve built our business on deep analysis of the spot market over the past 14 years, to forget that price spikes sound scary to most people. So we’ll tell you exactly why we stay so calm.
We’ve modeled all the half hour spot market prices from 2014-2016 in three key locations across New Zealand (that’s a lot of data!) and we know this…
The average spot market price is 6.9cents per kWh
Less than 1% of all spot prices are greater than 30cents per kWh
But 41.22% of spot prices are less than 6cents per kWh
This knowledge is at the heart of our business model.
Consumers being served by the traditional flat-price model of electricity retail are effectively paying a premium to guarantee that they won’t be exposed to the higher prices that happen less than 1% of the time. But they’re also missing out on low prices that happen 41.22% of the time.
So instead of being afraid of high prices, consumers can relax and enjoy the low prices they have access to with Flick.
A portion of a household’s consumption naturally occurs during lower price periods (like hot water heating and a fridge running overnight). And many of our customers simply ‘set and forget’ and are still making great savings just by riding the price curve.
High prices do happen – mainly when supply and demand are out of kilter, there are transmission constraints, and when generation isn’t available – it’s a reality of buying a product from a dynamic market that reflects the actual cost of electricity at any point in time.
But, like with any market, there are price signals which we give our customers through their online portal and mobile phones, so they can make an informed choice about when they use power. So if customers want to change a few things to take advantage when lower prices are available, or to avoid some of the higher prices, they can.
If you’ve still got questions just ask in the comments below, or email email@example.com. We’d love to hear from you!