Power Utilities and End Use Pricing 2024 : Good Practice Note (English)

Rapid technological change, which is transforming how electricity networks are used, requires corresponding changes to network tariffs. Technological advances and associated cost reductions in smart meters, self-generation, storage and EVs change how distribution networks are used. The rollout of smart meters and advances in electricity settlement regimes mean that customers and utilities have access to information about consumption that was not previously available, like its timing and profile over the day, capacity demanded and reactive consumption, and at a very limited additional cost. Distributed generation and self-generation make load forecasting more difficult but may also provide flexible export services to the distribution network. Storage solutions can be used to decrease consumption from the grid at peak times, avoid network reinforcement, provide ancillary services to the network or system operators, and allow energy arbitrage. EVs can add significantly to peak loading if price signals are not properly developed but can also offer opportunities for more flexibility if the enabling framework and the pricing signal are adequate. The focus of this note is to develop a set of recommendations for decision-makers in developing countries on how to design electricity retail and distribution tariffs to ensure that network users who incorporate and operate DERs, EVs and storage, pay for the use of the network in a way that maximizes the welfare of users and operators of the power system