What are time of use rates for?
image credit: Cost are then transferred to the rate payers
- Jul 30, 2020 5:48 pm GMTJul 30, 2020 5:51 pm GMT
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The answer, of course, is very simple.
The most expensive, on-peak rates signal the convenience of avoiding as much as possible consumption on these hours, transferring it to the off-peak hours, when it is cheaper.
On the supply side, the advantage of being able to meet higher energy consumption with the same generation, transmission and distribution infrastructure. This avoids CAPEX investments.
The assumption - of course - is that peak and off-peak hours are in line with reality.
It turns out that the peak of the Brazilian national system is varying. It was always on the "official" schedule between 5:30 pm and 8:30 pm. But for many months it has been noted that it can also occur in the middle of the afternoon. The reasons include changes (distributed generation for example), new power sources (more intermittent) and more recently the pandemic.
It is necessary to adjust the official peak and off-peak hours - under penalty of being wrongly signaled and consequently obtaining the opposite effect: increased costs due to a misalignment error.
Will the leaders of the electric sector have the initiative and commitment to "make it happen". Or is it just another cost to be paid by all customers ("business as usual")?