Smart Energy: utilities bring «time of use» tariffs forward

By 24 April 2019Scenario
Smart Energy

As energy generation and distribution get smarter, time of use tariffs spread globally. The idea is not completely new and follows the deployment of smart meters, which allow users to monitor their energy consumption in almost real time, and utility providers to better manage network loads and billing processes.

Smart meters enable the introduction of time of use tariffs, thus charging cheaper rates at certain times of day or night, when demand is low, and higher rates at peak times. Time of use tariffs are meant to encourage customers to shift their consumption to off-peak times and thus balance demand.

In Europe, the first country to launch a country-wide distribution of smart meters was Italy, where the «bioraria» tariff offered households a pricing scheme based on two time slots, but with a very narrow difference. The complete liberalisation of the Italian energy market, planned for July 2020, is expected to increase competion among utilities players, so there might be relevant news for users.

In other countries, such as Sweden, smart meters and time of use tariffs were adopted years ago. In the UK, a pioneer off-peak tariff appeared as early as in late 1970’s (it is still offered as «Economy 7»), and some providers are already trialling some new, dynamic pricing models.

 

In North America, time of use rates are available only to industrial customers in most Canadian regions, while in the US the situation is more fragmented, with different states moving at different speed towards the introduction of time of use tariffs.

In Asia, one of the most promising countries is India, where energy experts are urgently calling for measures to meet the rampant demand of power and ensure a stable and reliable distribution system. Currently, most Indian providers offer flat tariffs, but the situation might change in the near future, as utilities are investigating benefits of Smart Energy projects.

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