Design of a tariff scheme based on cost causality

Abstract

The electricity bill in Spain presents a serious problem: the outdated methodology for allocating network costs, as billing is based on contracted power and energy consumed, where contracted power bears the greatest part. The introduction of storage and customer self-consumption implies the need of a new network tariff design based on the information of smart meters. For this reason, it is necessary to design a methodology that will be explained in this thesis, to solve the new scenarios faced in the close future as: Use the network or system and self-consumption, electrification of demand o use of batteries. This thesis proposes a methodology for allocating network cost based on cost drivers (hourly network cost) and provides flexibility, according to the cost per voltage level, and the new challenges that we face with the increase of the distributed generation. The user will pay for the use of network rather than the contracted capacity. With the implementation of the new methodology the following benefits are achieved:  The new tariff reflect the real cost of the electricity consumption: the peak consumption will include the energy cost, more generation power and network (T&D) and the off-peak consume will include only the generation cost.  Clear price signal to the consumer: Consumers will know and decide when they must try to consume.  Electrification: one of the most important consequences of the new methodology is the increase of the electrification in off-peak hours where the energy price is too low and the network access tariff is low.  Demand management: consume in hours with low demand has an incentive. Domestic consumers are able to charge batteries to use it when there are peak hours. This will create changes in the monotone and the prices.  Groups: The cost of a client group is the same as the sum of the each customer costs. In addition, it allows us to achieve one of the main challenges for the current electricity market, which is the transition from a passive consumer to a more active consumer. The consumption period becomes crucial, so that will allow modification of consumer behavior, shifting consumption from peak hours to the hours in which energy is cheaper. All this is an important step because it allows: Efficient network prices, to issue clear price signals between peak and peak-off hours and hourly prices allow an efficient network cost allocation for customers with self-consumption.