Dynamic Network Tariff in Practices: Key Issues and Challenges

Abstract

A significant transformation in the energy sector is taking place due to power industry restructuring, ever-increasing employment of intermittent renewable generation, environmental constraints, and emergent prosumers such as electric vehicles (EVs). These factors impose the necessity of redesigning distribution network (DN) tariffs to promote renewable energy generation accommodation and to incentivize customers to promote energy efficiency. The moving loads (EVs) are also creating big challenges to the distribution system operator (DSO). The DSO has to act on network reinforcement deferral, energy losses reduction, peak power reduction, voltage control, ancillary services, improving power quality, and reduction in the load/ generation curtailment. Therefore, there is a necessity of redesigning distribution network tariffs to promote efficient network utilization and optimal customer response, for both short-term operation and long-term planning of the network. This paper critically reviews dynamic network tariffs used in several countries and provides key issues and challenges in designing the DN tariffs.