Power-based distribution tariff structure: DSO's perspective

Numerous changes will take place in the electricity distribution system and business in the near future. Especially, electricity end-use may significantly alter the electricity distribution network loads. The main technologies that will have effects on electricity end-use may be microgeneration, heat pumps, electric vehicles, demand response, and energy storages. Moreover, rising reliability demands and network costs will increase pressure to raise the prices of distribution tariffs. These changes pose challenges for electricity distribution business. The present tariff structures are not optimal anymore from the distribution system's perspective. At the same time, new metering infrastructures may provide opportunities to develop more intelligent tariff schemes. From the DSO's point of view, a power-based distribution tariff structure would be the most advisable option, because it could have positive impacts on the network loads. This paper studies how the tariff scheme would affect the distribution network loads, if customers had motivation to decrease their peak powers.