In Europe, the Swedish Energy Research Centre has called for utilities' tariffs to include power and time components to ensure cost reflectiveness.The research centre -Energiforsk - also stipulates that consumption patterns are important and should be taken into account when categorising an energy suppliers' customer base.

Therefore customer patterns should dictate what tariff the distribution system operator offers each customer.

These are some of the recommendations Energifosk drafted in its new report 'Synthesis of electricity tariffs' analyzing different tariff models being implemented by Swedish utilities from a cost perspective.

The report is an analysis of a project started from real hourly consumption data from almost 200,000 Swedish low-voltage customers between 2012 and 2014.

The project recalculated economic history and by this created a new understanding of alternate electricity tariffs models that can affect revenues both on aggregated level and different types of customers.

However in both scenarios, the report predicts that the change in the energy system will accelerate with an increasing influx of electric cars and PV systems, and that the technical development facilitates automatic demand response for a larger share of customers.

Range of electricity tariffs

The report states the Swedish electricity retail system can benefit more by offering a range of tariffs.

Energifosk believes this will ensure all types of customers gets the opportunity to choose the right tariff and is therefore presented with the proper incentive to perform cost-saving actions providing benefits to the grid also.

By offering a range of tariffs, utilities will increase their dialogue with customers resulting in increased customer satisfaction, the report concludes.