Shifting toward dynamic pricing of electricity: What did we learn from the 2021–2024 energy crises?

As the share of variable renewable energy sources grows, balancing electricity supply and demand increasingly relies on demand response (DR). One important way to enable DR is through dynamic pricing (DP), which encourages consumers to adjust the timing of their electricity use based on price signals. Yet, despite regulatory support and technological progress, the adoption of DP among domestic energy consumers remains limited. This study examines the role of Finnish electricity retailers in promoting DR through DP, using the lens of institutional complexity. We draw on 66 interviews and data on the markets and product offerings from 2021 to 2024, a time when companies needed to respond to energy crises affecting electricity retail. Our findings reveal that despite the energy crises pushed most electricity retailers in Finland to actively offer dynamic pricing as their risk management strategy, the industry did not converge uniformly towards this option. Instead, stable, flat electricity prices continue to hold a dominant position in the Finnish retail market. The resurgence of flat electricity tariffs can be attributed to retailer scepticism regarding consumer interest, societal concerns about pricing vulnerability, loyalty towards regional customers, and the conflicting principles of market efficiency versus responsibilities of regulated network servicing and management. • Electricity retailers pushed dynamic pricing during the energy crises • Sense of responsibility for vulnerable consumers conflicted with business logic • Policy is ambiguous with dynamic pricing of electricity for households • New dynamic-type tariffs contain considerable flat-pricing structures • Vertical integration shapes retail companies' behaviour