2021/11/05 by Sigurd Bjarghov, Bjarghov, Sigurd, Hossein Farahmand +3
Engineering · #Electric Power System Optimization #FOS: Economics and business #General Economics (econ.GN) #Microgrid Control and Optimization #Smart Grid Energy Management
paper · pdf · doi:10.48550/arxiv.2111.06253
openalex publication_date 2021/11/05 · openalex created_date 2022/05/05 · openalex updated_date 2026/07/28
While volume-based grid tariffs have been the norm for residential consumers, capacity-based tariffs will become more relevant with the increasing electrification of society. A further development is capacity subscription, where consumers are financially penalised for exceeding their subscribed capacity, or alternatively their demand is limited to the subscribed level. The penalty or limitation can either be static (always active) or dynamic, meaning that it is only activated when there are active grid constraints. We investigate the cost impact for static and dynamic capacity subscription tariffs, for 84 consumers based on six years of historical load data. We use several approaches for finding the optimal subscription level ex ante. The results show that annual costs remain both stable and similar for most consumers, with a few exceptions for those that have high peak demand. In the case of a physical limitation, it is important to use a stochastic approach for the optimal subscription level to avoid excessive demand limitations. Facing increased peak loads due to electrification, regulators should consider a move to capacity-based tariffs in order to reduce cross-subsidisation between consumers and increase cost reflectivity without impacting the DSO cost recovery.