Load demand pricing - Case studies in residential buildings

Since the liberalisation of the Swedish electricity market in 1996, the competition between utilities has increased, and the generation capacity has gradually been adjusted to suit the demand. Consequently, the earlier excessive electricity production capacity has been reduced. However, if the gap between the generation capacity and demand will be too narrow, this may result in notable power shortages in the electricity market. In order to achieve lower load demand, to avoid load peaks and to reduce electricity cost, a Swedish electrical utility - Skanska Energi Nat AB (SENAB), is planning to include a load demand component in its electricity tariff to make customers more aware of their energy consumption pattern and (possible) load demand problems. This study investigates the impact of the new tariff from the viewpoint of the utility as well as its customers, compared to the existing tariff. The project was carried out by the Efficient Energy Use in Buildings Research Group at the Department of Energy Sciences, Lund University. The results of the investigation show that if a load demand component were to be introduced into SENAB’s network tariff, primarily customers with a 16-ampere fuse would incur higher network charges whereas customers with a higher fuse level would incur lower charges. With the existing network tariff, customers with high fuse levels pay relatively high standing charges in relation to their exploitation of the grid and as such they are subsidising customers with lower fuse levels. The study also shows that it is important that the new load demand pricing strategy (tariff) is communicated to customers in a comprehensive manner, so that they understand it and furthermore realise that they can save money by changing their energy consumption patterns without lowering their standard of living or comfort. (Less)