Network operators are investigating the implementation of a new tariff for low-volume users, such as households. This new tariff has a rate per kWh that varies per hour, also called a Time-of-Use grid tariff (ToU). The tariff is low when there is low grid load for off-take (day and night) and high when there is high electricity demand (morning and evening). In this exploratory study, we examined the impact of a tariff model for low-volume users using Time-of-Use (ToU) methodology. We determined the impact of home batteries and electric cars (EVs) on energy costs and benefits, as well as the impact on the local electricity grid.
The business case model of a 10 kWh home battery shows that a ToU grid tariff has a positive impact on home battery revenues. The ToU grid tariff leads to higher costs for electricity off-take from the grid, resulting in more cost savings from home batteries. However, the ToU grid tariff makes energy trading less attractive since it increases the costs for electricity off-take from the grid. This also makes trading in the energy market less profitable. By introducing a ToU grid tariff, an average household with one electric vehicle (EV) will pay higher electricity costs in 2030 if the EV is not charged on a price-driven basis. This is because a household with EVs off-takes a relatively large amount of electricity from the grid, which also increases the total ToU costs compared to a fixed capacity tariff. By exercising control over hourly electricity prices, electricity costs can be significantly reduced by charging at cheaper times.
We also examined the grid impact of a ToU grid tariff for six districts. We assumed that 33% of homes use additional solar PV, heat pumps and EVs; this increases the grid load by +150%. In this scenario, the introduction of a ToU grid tariff would result in the grid load remaining approximately the same. If 10% of households also make use of a home battery to reduce their energy costs and trade on the day-ahead market, the grid load would increase by 25%. A ToU grid tariff can reduce this additional grid impact to +15% or a peak reduction of around 8%.