Designing demand- and production-side tariffs to mitigate grid expansion costs within the Swiss regulation scheme

Primeo Energie is a Swiss DSO, based in Northwestern Switzerland. Its main goals are to provide a secure, effective, and cost-efficient grid infrastructure. This paper investigates how Primeo Energie designed new tariffs on the production and demand side to enable demand- and production-side response as an alternative to costly grid expansion without direct system intervention. New tariffs were introduced as voluntary products with a simple and effective tariff structure, including a differentiation between winter and summer as well as an intraday structure with two to three steps. These tariffs create financial incentives to customers providing grid-oriented demand- and production-side response. At the same time, they fulfil boundary conditions to comply with Swiss regulatory requirements. Generally, a combination of the tariffs on the demand and production side proved beneficial as peaks in both directions (electricity feed-in as well as demand) can be smoothed. Nevertheless, both tariffs can be seen as intermediate steps in the development of fully dynamic tariffs, which should be able to target grid challenges more precisely. A constant monitoring of reactions from customers under the new tariff regimes is key to the further development of these tariffs.