Analyzing the Impact of Dynamic Tariff Adoption and Regulatory Options on Distribution Grids with an Open-Source Framework

Dynamic tariff adoption is considered to be an important driver of demand response, enabling more sustainable and reliable power systems. However, first studies have shown that a high share of households subscribing to dynamic tariffs can lead to so-called “avalanche effects” on the distribution grid level, wherein load profiles align across households. Avalanche effects can create new demand peaks that necessitate costly grid reinforcement measures. Here, we analyze the impacts of policy options for grid charge and solar photovoltaic (PV) feed-in remuneration on grid reinforcement costs given increasing shares of dynamic tariff adoption. The analysis framework is open-source and uses empirical data from real households. We find that the widely proliferated regulatory scenario with volumetric grid charges and PV feed-in-tariffs leads to heavy reinforcement needs. We show that novel policy options, such as rotating or segmented grid charges, can alleviate grid reinforcement needs.