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

Deployment of time-of-use (ToU)-based retail energy tariffs (i.e. tariff for energy consumption – not the tariff for distribution service) is a common practice to incentivize consumers to use more energy at off-peak times. Distribution service 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 address the effect of ToU pricing (i.e. time-dependent) of DSTs on peak shaving and technical loss minimization in power distribution grids. Here, the main focus is to assess the level of consumers’ responses to ToU-based DSTs. Addressing such a problem necessitates detailed modeling of the distribution grid (including low-voltage grid) on the one hand and accurate modeling of the elasticity of consumers to ToU-based DSTs on the other hand. The other significant factor is the share of DST-originated cost within the total bill of the consumers. Considering these factors, the proposed approach is implemented on the pilot networks in the region of service associated with different distribution companies in Turkey. Response of consumers to ToU-based DSTs are addressed quantitatively in terms of peak shaving and technical loss minimization in the pilot regions. In addition, financial aspects of ToU-based DSTs are outlined from distribution companies and consumers standpoints.