Time-of-Day Tariffs: Matching Load Curves and Solar Energy generation across Indian states
Introduction
Time of Day (ToD) tariffs are effective tools in energy management, particularly in countries like India, where the electricity demand is rapidly increasing. These tariffs are designed to vary the cost of electricity based on the time it is consumed, offering lower rates during off-peak hours and higher rates during periods of peak demand. This system not only incentivizes consumers to shift their energy usage to off-peak times but also helps in integrating renewable energy into the grid, improving the overall stability of the power system.
The Evolution of ToD Tariffs in India
India's journey toward adopting ToD tariffs began with legislative support through the Electricity Act of 2003. This act allowed for the differentiation of tariffs based on various factors, including the time of use. The National Electricity Policy of 2005 further advocated the establishment of time-differentiated tariffs, particularly for large consumers. More recently, Electricity (Rights of Consumers) Amendment Rules, 2023 have emphasized the importance of smart meters and data analytics in creating more efficient tariff systems.
Understanding Time-of-Day (ToD) Tariffs and Energy Consumption in India: An In-Depth Analysis
Current ToD Tariff Landscape in India
According to the Ministry of Power, ToD tariffs now cover High Tension (HT) customers across India, with a future scope to extend these tariffs to rural and urban commercial users and EV consumers. As of now, about 16 states have adopted ToD tariffs, though their application and effectiveness vary.
The key challenge with the existing ToD structure is its misalignment with actual consumer behavior and energy availability. In many cases, consumers do not fully benefit from solar hours, which are considered off-peak, and peak hours tend to focus more on traditional evening demand periods rather than midday solar generation peaks.
Currently, in India it's mandatory of states to have ToD rates for industries above 10kw connection.
Analysis and methodology
Analysis of ToD tariff rates was conducted for all the discoms in all states/UTs, except for the following: Uttarakhand, Manipur, Tripura, Nagaland, Sikkim, Andaman and Nicobar, Lakshadweep, and Mizoram.
Data sources include the Ministry of Statistics and Programme Implementation (MoSPI), for selecting industrialised states, and the tariff orders of all the DISCOMs in all states and Union Territories, detailing the electricity pricing structures and regulatory compliance for power distribution.
Solar hours vary for each state based on its geographical location. The average sunrise and sunset hours for the year are considered, and solar hour data is obtained from the India Meteorological Department (IMD).
Average load curves for all DISCOMs and all consumer groups in each state are considered. For peak load, a value above 0.97 of the highest peak load for that month in the state is used, while for off-peak load, a value below 0.80 of the highest off-peak load for that month in the state is utilized.
State-wise breakdown of ToD tariff effectiveness in top 10 industrial states in India
To understand how ToD tariffs function across India, let's examine the performance and unique features in several major states.
Top 10 industrial states[1] selected based on data from the Ministry of Statistics and Programme Implementation (MoSPI) include Maharashtra, Tamil Nadu, Gujarat, Karnataka, Uttar Pradesh, Andhra Pradesh, West Bengal, Punjab, Rajasthan, and Kerala.
Delhi: A consistent ToD structure
Delhi has shown a year-on-year correlation between its load curves and ToD tariffs from 2020 to 2023. This alignment is a positive sign for grid stability, particularly during the summer months (May-August) when energy demand is highest. However, there remains a gap: despite the consistent application of ToD, consumers are not benefiting from any significant incentives, indicating a need for reform to encourage more off-peak usage.
Karnataka: Solar integration without consumer benefit
In Karnataka, peak energy load tends to coincide with solar production during the afternoon. While this should benefit grid stability, consumers receive no financial incentives for using electricity during solar hours, limiting the potential for greater uptake of solar power.
Gujarat: Seasonal variance in peak load
Gujarat presents a mixed case. The state implements ToD tariffs in the afternoon to coincide with solar generation, except during the monsoon months of July and August. This variance complicates consumer energy management, as tariff rates fluctuate seasonally. However, the broader alignment with solar hours is a promising step for renewable energy integration.
Tamil Nadu: Fluctuating peak load
Tamil Nadu's peak load changes dramatically across months, making it difficult to implement a stable ToD structure. For example, January sees peak demand from 10 AM to noon, while July experiences peak loads from 8 PM onward. This variability makes it challenging to establish a consistent tariff system, and consumers find it hard to adapt their consumption patterns accordingly.
Haryana: Limited ToD application
In Haryana, ToD tariffs are applicable for only five months each year, as the state’s energy demand remains low. Peak load occurs during the afternoon, but the short duration (around 4 hours) and limited ToD application period limit the scope for significant grid or consumer benefits.
Uttar Pradesh: Seasonal ToD variations
Uttar Pradesh demonstrates a highly seasonal approach to ToD tariffs, with stark contrasts between summer and winter patterns. For instance, summer peak hours extend from 9 AM to 1 AM, while winter peaks occur from 7 PM to 10 PM. Despite this seasonal distinction, consumers are not incentivized to adjust their usage to match solar energy availability, presenting a missed opportunity for energy savings and grid stabilization.
Telangana: Missed solar opportunities
In Telangana, peak loads consistently occur during solar hours (midday), but the ToD tariff structure does not reflect this, resulting in a lack of consumer incentives. This disconnect between tariff orders and energy availability means consumers miss out on potential savings, and grid stability is not optimized.
Maharashtra: Shifting peak loads
Maharashtra faces a unique challenge with fluctuating peak loads throughout the year. From March to August, peak demand moves from afternoon to evening and back again, making it difficult for the state to establish a standard ToD tariff structure. This fluctuation presents challenges for both consumers and energy providers, as demand does not consistently align with renewable energy availability.
Punjab: Lack of incentives
Punjab's ToD tariffs do not align well with its peak load patterns. Most of the state's peak demand occurs during the afternoon, overlapping with solar hours. However, consumers receive no financial benefit for shifting their usage to these periods, limiting the potential for renewable energy integration.
Rajasthan: Optimized for solar energy
Rajasthan stands out as one of the few states where ToD tariffs align well with solar energy generation. The state has successfully integrated off-peak tariffs during solar hours, offering both consumers and energy providers a win-win situation. This alignment not only benefits consumers through cost savings but also contributes to grid stability.
Andhra Pradesh: Model of synchronizing the load curve, ToD and solar period
In Andhra Pradesh, peak loads consistently occur during solar hours (midday), and the ToD tariff structure does reflect this, resulting in consumer incentives. This connect between tariff orders and energy availability means consumers gain potential savings, and grid stability is optimized.
