Distribution Grid Tariff Design : Transition to a demand based distribution grid tariff design to manage future trends of electric vehicles and peak demand

Abstract: The purpose of this study is to examine possible tariff designs for a Swedish DSO to better reflect the individual’s future use of the grid when it comes to the expected effects of EV. A qualitative research method with a combination of an experimental and comparative case study design was carried through. The literature review involved data gathering within the subjects of grid tariff design, pricing of natural monopolies and behaviour related to electricity use. Empirical data consisted of quantitative data from the grid in combination with interviews of 5 respondents. With a systematic combining approach, the theoretical framework, empirical data and analysis evolved simultaneously. The results were analysed through emerging themes and evaluated with simulations. The study has shown that a static and easy to understand tariff is preferable. A reflective way to price distribution of electricity does not imply a correct breakdown of allocating costs to direct causes of them. When designing the tariff, a DSO must be aware of the psychological barriers and consequences a tariff design can induce. By that we find the combination of a fixed, demand and ToU component should give incitements well enough to make customers mindful of how they use their electricity. During a transition to a new tariff design, a customer focus approach should be used, were transparency and simplicity are keywords. The future could imply a shift from static to dynamic tariffs designs in which enabling technologies will have to ease the complexity for the customer in order to break down the psychological barriers.