Alternative Power-Based Pricing Schemes for Distribution Network Tariff of Small Customers

The development of electricity distribution pricing is becoming an increasingly relevant topic due to various factors. The Distribution System Operators (DSO) face challenges regarding their tariffs of small customers when the customers invest in energy efficiency and small-scale energy production. Thus, the DSOs must evaluate their pricing practices to maintain a profitable and sustainable business. To respond to changes in the operational environment, transitioning toward power-based pricing is seen as a potential development direction. In this paper, we study various power-based distribution tariff (PBDT) structures and evaluate them from different viewpoints. To support the analysis, we provide a study where alternative tariff structures are analyzed based on data from two Finnish DSOs to investigate the impacts of the tariffs on the distribution fees of the customers and on the turnover of the DSO.