Peak shaving and technical loss minimization in distribution grids: a time-of-use-based pricing approach for distribution service tariffs

Abstract

Deployment of time-of-use (ToU)-based retail energy tariffs (i.e. tariff for energy consumption – not the tarifffor distribution service) is a common practice to incentivize consumers to use more energy at off-peak times. Distributionservice tariffs (DSTs) are usually time-independent, which results in insensitivity of load to the distribution service cost.However, DST can also be time-dependent, which is studied in this paper. This study presents a methodology to addressthe effect of ToU pricing (i.e. time-dependent) of DSTs on peak shaving and technical loss minimization in powerdistribution grids. Here, the main focus is to assess the level of consumers’ responses to ToU-based DSTs. Addressingsuch a problem necessitates detailed modeling of the distribution grid (including low-voltage grid) on the one handand accurate modeling of the elasticity of consumers to ToU-based DSTs on the other hand. The other significantfactor is the share of DST-originated cost within the total bill of the consumers. Considering these factors, the proposedapproach is implemented on the pilot networks in the region of service associated with different distribution companies inTurkey. Response of consumers to ToU-based DSTs are addressed quantitatively in terms of peak shaving and technicalloss minimization in the pilot regions. In addition, financial aspects of ToU-based DSTs are outlined from distributioncompanies and consumers standpoints.