Prosumer Synchronisation Risk: Impacts of Time-Varying Tariffs on Distribution Network Expansion

Abstract

The rapid deployment of distributed energy resources, including heat pumps, electric vehicles, photovoltaics, and battery storage, is reshaping the operation of low-voltage networks. While distribution system operators often aim to develop time-varying tariffs to incentivise network-friendly behaviour and defer reinforcements, they risk triggering prosumer synchronisation. As prosumers follow price signals, their behaviour may synchronise, avoiding existing load peaks while creating undesirable peaks at other times. This paper quantifies the impact on low-voltage network reinforcement needs when shifting from flat tariffs to two time-varying tariffs: Time-of-Use and Real-Time Pricing. Applying a mixed-integer linear model across 471 low-voltage reference networks in Switzerland, we evaluate expansion requirements under projections of distributed energy resource deployment for 2050. In the model, prosumers operate their distributed energy resources in accordance with their subscribed electricity tariff to minimise costs, and the distribution system operator subsequently optimises reinforcements. Our results demonstrate that while adopting time-varying tariffs can reduce reinforcement investment costs by more than 50%, high adoption rates can reverse this declining trend. Specifically, once prosumer adoption exceeds the optimal thresholds of 50% for Time-of-Use and 40% for Real-Time Pricing, reinforcement needs increase by 39% and 134%, respectively, for an additional 20% of tariff adoption.