Electricity prices are driven by production and demand.
High demand = expensive electricity prices.
Low demand = cheap electricity prices.
(Current market price)
SPOT is for you who want to get all the price fluctuations in the market.
The advantage is when it is not so hot or cold season. There will probably be less demand for power / electricity here. Little demand pushes down the price of electricity. Therefore you get a cheaper power.
The disadvantage can be in cold seasons as in winter. In such seasons there will be a high demand, and thus more expensive electricity prices.
Another disadvantage is when it is dry, little wind and little production. Here, electricity prices will also be more expensive.
Fixed price is predictable. That is, you get the same price regardless of the market’s electricity prices as of today.
How is the Fixed Price set up?
We at Red Sea Energy had set the Fixed Price based on historical spot prices. We have taken as a starting point from 2016-2020, and found the average price. And set up the fixed price.
The advantage: in cold and dry seasons when the market price is high, the fixed price will be low.
The disadvantage: when the market price / spot price goes down, usually towards summer time, the fixed price will remain unchanged. In other words: you do not get the price fluctuations in the Fixed Price.