Energy storage enables modification of the customer load profile from the grid perspective without leading to a decrease in comfort level. To meet the future challenges of the energy sector, distribution system operators (DSOs) in Finland have recently discussed power-based distribution tariffs (PBDTs) for small customers. The current distribution tariffs of small customers do not respond well to current challenges, and they require reform. The peak powers of the customers can be decreased with energy storage, and via incentives included in the PBDTs, energy storage can prove to be profitable for household customers. In this paper, we study the profitability of electrical energy storage under different pricing structures. The study simulates changes in customer consumption with a modeled storage system. Simulations consider the requirement of load forecasting in the storage control system. The results of the study show that energy storage can be profitable if the consumption includes only a small number of high peak loads during the pricing period when applying new distribution tariff structures. However, the price level of the tariffs and the tariff mechanisms affect the results.

This study discusses the development of distribution tariffs of small customers. Future changes in the electricity sector challenge the present distribution tariff structures and instead of a passive approach, the distribution system operators (DSO) have the opportunity to respond to the challenges by applying novel tariff structures. The movement towards power-based distribution tariffs (PBDT) has been seen as a very potential development direction. However, before implementing PBDTs, or any other novel tariff structures, it has to be ensured that the change will not cause unwanted outcomes such as too aggressive an impact on the distribution fees of the customers or on the total revenue of the DSO. The main focus of this study is on the transition viewpoints from present tariffs towards one selected PBDT structure.

The cost reflectivity of electricity distribution network tariffs has been debated in several countries, and various ways to enhance it have been investigated in recent years. However, the recent academic literature regarding the approach based on cost causation has a clear gap because no case studies show how distribution network tariffs can be determined in practice for large customer groups. This article offers a calculation methodology to determine distribution network tariffs based on cost causation along with a case study where unit prices are determined for the tariff structures still widely used today using the data for two separate network areas being operated by two Finnish distribution system operators (DSOs) in an unbundled electricity market environment. The results of the case study show that the total differences between the target and the realized turnovers in both investigated networks are smaller than 1%, which means almost a full cost recovery. In addition to traditional tariff structures, the proposed calculation methodology can also be modified to design and determine other pricing schemes. The need for systematic calculation processes is growing to improve the cost reflectivity of present tariffs and adapt to the needs of the evolving operating environment, novel tariff structures, and new emerging customer groups.