Incentivizing capacity grid tariffs as a building block for the energy transition

Abstract

Reinventing distribution tariffs is a necessity today and could be a catalyzer for energy transition. Distribution tariffs should incentivize the customer to optimize network costs. Therefore tariffs should reflect the fundamental needs of the DSO’s: maintenance costs and network capacity. The challenge is to translate these fundamentals into individual tariffs. This will encourage self-consumption, peak shaving and flexibility. The key message to the end-user should be: “For your important electrical appliances like a boiler, a heat-pump, an electrical vehicle etc., invest in intelligence that allows you or your supplier/aggregator to minimize your energy bill by optimizing in real time your energy flows.” Incentivizing grid tariffs are only possible with a smart meter with 15’ data. This paper will illustrate how incentivizing capacity network tariffs, especially for low voltage customers., can:help to integrate new electrical appliances into the grid, avoiding congestion problems and grid investmentsbe non-dynamic, simple, understandable and not penalize the customer for a “single mistake”be a catalyzer for market flexibilitybe a building block for DSO local services, preventing critical networks situationsfinancially clarify the roles and responsibilities of the DSO and the market partieshelp to develop local communitiesbe non-disruptive for “classic” customersTechnology is mature. With new regulated grid tariffs, the regulation will enhance the use of this technology for the right goal.