Fortum Duo – A more stable alternative to spot-priced electricity

So far, 90 % of Duo customers have had an average consumption impact between -1 c/kWh and +1 c/kWh. This means that in some months, the consumption impact was outside the aforementioned range, but when the smaller and larger consumption impacts of different months are averaged, most Duo customers have an average consumption impact within +/- 1 c/kWh.

Consumption impact does not increase or decrease based on how much electricity you use in total. Both in a small apartment and a large detached house, consumption impact can be the same, for example, -0.5 c/kWh or +0.5 c/kWh. However, the cost or saving on the bill due to consumption impact depends on how much electricity you use within the month. In a small apartment, you might use about 150 kWh/month, so a -0.5 c/kWh consumption impact reduces the monthly bill by 75 cents, and a +0.5 c/kWh consumption impact increases the monthly bill by 75 cents. In a large electrically heated detached house, you might use about 1,600 kWh/month, so the same -0.5 c/kWh consumption impact reduces the monthly bill by 8 €, and a +0.5 c/kWh consumption impact increases the monthly bill by 8 €.

Additionally, the general price of spot electricity affects the magnitude of the consumption impact: the more expensive spot electricity is on average during the month, the greater the positive or negative consumption impact is, i.e., the further it is from zero. Cheaper spot electricity causes the consumption impact to be very close to zero. Read more below in the question "How does the increase or decrease in spot electricity prices affect consumption impact?"

What factors affect the consumption impact?

The total amount of electricity you use does not affect the consumption impact, only whether your electricity use is more during cheaper or more expensive hours of spot-priced electricity.

Factors that affect the consumption impact most are those that consume the most electricity. So, keeping lights on or off doesn't affect it, as home lighting generally uses a very small portion of total electricity consumption. Instead, things that momentarily consume a lot of electricity include:

• Heating the sauna
• Cooking
• Electric heating (if your home is electrically heated)
• Electric car charging (if you charge an electric car at home)
• Laundry washing and using dryer
• Dishwasher
   

If you can time the above or other high-electricity-consuming activities to cheaper hours, your consumption impact is likely to be small or negative. If you do the above activities mainly during expensive hours, your consumption impact will be positive, i.e., price-increasing. See above for how large the consumption impact generally is.

When should I use electricity?

You can follow spot electricity hourly prices, for example, from the Oma Fortum app or online. If you want to reduce your consumption impact, you should time your electricity use to hours when the hourly price of electricity is lower. Electricity is generally cheapest at night and on weekends, but daily variation is significant, so there are often cheaper hours even on weekdays.

This chart shows the average hourly spot prices (March 2023 – August 2023). By using electricity when it's below the monthly average price, i.e., under the line, you lower your consumption impact, while using electricity when the price is above the line raises your consumption impact.

Consumption impact is determined at the end of each month based on your hourly electricity consumption and spot electricity hourly prices. Consumption impact is calculated according to the formula below.

Practically, in the first part of the formula, your hourly electricity consumption (kWh) is multiplied by spot electricity hourly prices (c/kWh). This shows what your price would have been if you had a spot electricity contract. It's divided by your monthly electricity consumption (kWh), yielding the average price you would have paid for electricity with a spot electricity contract (c/kWh). That number minus the average spot electricity price (c/kWh) for that month gives your consumption impact (c/kWh).

Your consumption impact is positive, i.e., price-increasing if your average hourly price of electricity consumption calculated with spot electricity prices is higher than the average spot electricity price. Conversely, your consumption impact is negative, i.e., price-reducing if your average hourly electricity consumption price calculated with spot electricity prices is lower than the average spot electricity price for the month.

Mathematical formula

Here's the same thing expressed as a mathematical formula.

where
c = your hourly consumption (kWh)
p = spot electricity hourly price (c/kWh)
C = your total monthly consumption (kWh)
p = spot electricity monthly average price (c/kWh)
 

Spot electricity prices affect consumption impact in two ways. First, using electricity during cheaper and more expensive hours determines whether your consumption impact is positive or negative. Read more about this in the questions and answers above. Secondly, the average price and range of spot electricity fluctuations together with your consumption affect how close to or far from zero your consumption impact is.

What if spot electricity prices rise?

As spot electricity prices rise, the consumption impact grows. If your consumption impact is negative, i.e., price-reducing, as spot prices rise, your consumption impact becomes more negative, i.e., you save more. If your consumption impact is positive, i.e., price-increasing, as spot prices rise, your consumption impact becomes larger.

However, this effect is much smaller than with a spot electricity contract because Duo includes a fixed price part.
 

What if spot electricity is really cheap?

In months with cheap spot electricity, the consumption impact is always small, i.e., close to zero. It can still be negative or positive, but not very large.

Example: If the average monthly spot electricity price was 4 cents and the hourly prices mostly fluctuated between 3-5 cents during the month, the consumption impact could be at most +/- 1 cent, even if you used electricity only during the cheapest or most expensive hours, as the cheapest hours are only 1 cent cheaper than the monthly average and the expensive ones only 1 cent more expensive.