Impact Analysis of Power Based Tariff‐Driven Peak Load Shaving on Electricity Distribution Networks and Distribution Business

ABSTRACT The present distribution grid tariffs are under a major renewal process, or a renewal is in consideration, as the traditional tariffs do not reflect well enough the cost structure of the distribution grids. Power‐based tariffs (PBTs) have been proposed as an alternative that could lead to the more efficient use of energy resources and the whole energy system. In this paper, an analysis is made to estimate the electricity distribution grid impacts of PBT‐based customer‐side peak load shaving on the tariff development. The effects are estimated under different PBT pricing schemes. The effects are simulated on a real distribution network using customers' hourly automatic meter reading consumption data. The effects of PBT‐incentivised peak load shaving are analysed at different levels of the distribution grid. The results show that power‐based tariffs can provide a significant incentive to customers to invest in a peak‐shaving battery energy storage system (BESS), but the benefits from reduced distribution network peak loads can be lower than the efforts required from the customers. On the other hand, if BESSs are purchased for other purposes, PBT‐based peak shaving can reduce DSOs' risks, and the benefits for grid load rates can be gained with less effort.