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Polity & Governance
Mahesh

30/06/23 23:10 PM IST

Time of Day Tariff

In News
  • Union government introduced an amendment to the Electricity (Rights of Consumers) Rules, 2020, recently.
Time Based Tariff
  • The time-based power tariff structures mentioned in the announcement can be categorized into two types: static and dynamic.
  • Static tariffs are predetermined tariffs based on specific time blocks, while dynamic tariffs are determined in real-time according to the actual demand conditions.
  • The focus of the proposed changes is on static tariffs, which will be decided in advance for different blocks of the day.
Discounted Tariffs
  • Under the Time-of-Day (ToD) tariff system, the power tariff during “solar hours” will be at least 20% lower than the normal tariff.
  • The duration of solar hours will be specified by the respective State Electricity Regulatory Commission (SERC).
  • This initiative aims to encourage consumers to consume electricity during daylight hours when solar power generation is at its peak.
  • By providing discounted tariffs during solar hours, consumers are incentivized to shift their energy consumption to these periods.
  • For commercial and industrial consumers, the tariff during peak hours will experience a minimum increase of 20% compared to the regular tariff.
  • This surge pricing during peak consumption aims to discourage excessive load on the grid during high-demand periods.
  • The ToD tariff system will be applicable for commercial and industrial consumers with a maximum demand of 10 KW and above from 1st April 2024.
  • For all other consumers, except agricultural consumers, it will be effective from 1st April 2025.
Significance
  • Time-based power tariff structures have been implemented in approximately 20 countries, encompassing some 17 European nations as well as the United States.
  • The objective is to balance electricity demand and supply efficiently while promoting the integration of renewable energy sources.
  • One of the major challenges in integrating renewable energy generation is the variability in generation trends.
  • Solar and wind power are dependent on weather conditions and may not align with the demand cycle.
  • To address this issue, alternative technologies such as hydrogen and hybrid generation models blended with off-stream pumped storage are being considered for energy storage.
Source- outlook

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