Distributional effects of Time of Use tariffs based on electricity demand and time use

Timur Yunusov and Jacopo Torriti

Abstract

The introduction of Time of Use (ToU) tariffs may affect residential electricity consumers differently depending not only on their financial position but also time availability. The aim of this paper is to identify socio-demographic groups which may be financially advantaged or disadvantaged by the introduction of ToU tariffs. Assuming no behavioural change, we impose ToU tariffs on UK half hourly smart meter data and the synthetic demand profiles for different household composition generated using the 2014–2015 UK Time Use Survey data and optimisation of energy consumption per activity against the smart meter data. The distributional effects of ToU tariffs are obtained for customer segmentation and socio-demographic groups, and presented in terms of peak to off-peak ratios and impacts on the synthetic demand profiles. Findings on the distributional effects of ToU tariffs reveal regional differences (e.g. positive effects for high income groups in London) and household composition similarities (e.g. positive effects for households with children not in the high-income group).

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