Time of Use tariffs

Time-of-Use, commonly referred to as ToU, focuses on the alleviation of the EV charging demand during peak times by enforcing a tariff. As the name indicates, the price signals are time-varying, determined based on the power system balance or on short-term wholesale market price signals (such as day-ahead or intraday price signals).

Graphic displaying the inputs of Time of Use (ToU) tariffs

Implementation of ToU tariffs

ToU tariffs have been executed to change consumer behaviour and to facilitate the strain of energy utilization required at its most sought-after time. This empowers effective utilization of the power grid system and can diminish costs for both the utility and clients.

The usage of these tariffs has become an effective way for utility providers to deal with their power production, record energy consumption and more significantly, it permits consumers to assume responsibility for their energy bills. Consumers are free to decide how and when to react to price signals and to adjust consumption during specific time intervals. With consumers’ higher responsiveness to price signals, the whole power system, as well as consumers themselves, can benefit.

Prevention of grid overload

When EV drivers implement ToU, it ensures when EV charging is the least disruptive to the grid, which ultimately prevents an overload. This presents new difficulties, if such a large number of EV drivers move too off-peak charging. Nevertheless, these concerns can be moderated by smart charging by considering elements like charge status, charge rate and others, distributing charging over a greater time frame. When EV charging (or discharging) occurs, the implications for the grid network could be significant.

Without smart charging, EV charging is probably going to occur during existing electricity system peak times when numerous individuals arrive home from work (usually between 5pm-7pm). This would require radical degrees of extra investment in both the systems and in electrical generation capacity to meet demand, with the costs falling onto the customers.

The capacity to delay or direct charging could bring about a better balance of the system and limit the requirement for expensive network upgrades. This can be passed through to consumers via cheaper electricity tariffs or other offerings such as rewards. Furthermore, EV drivers are able to set their charging preferences remotely through applications with having to manually connect and disconnect their car.

EV smart charging guarantees that the supply and demand of electricity is better balanced, as it is intended to move electricity utilization away from existing peaks.

This what it looks like before and after smart charging has been applied.

Two tables explaining how EV smart charging works