STANDARD LOAD PROFILES – ‘THE TICKET’ TO THE FREE MARKET

This is a serial publication in support of non-household customers, connected to a low-voltage network, who are due to face a compulsory split-up with the regulated market and to meet the privileges, though the responsibilities too, of the free market, as per the Energy Law amendments.

Who needs standard load profiles (SLPs) in the liberalisation process?

Free market transactions require interval/hourly metering devices (electrometers), whereby consumption is measured on hourly basis, is compared with the predefined customer request (usually via the trader or the balance group coordinator) and then the plus/minus deviations are paid at the balance energy prices announced for the respective hour.

It is not always a cost-effective endeavour to use expensive (hourly/interval) metering devices to measure any individual consumption. That is why, for smaller consumers (households and small businesses attached to LV networks) such SLPs are used as an alternative tool for their inclusion in the free market.

In line with the Rules for Measuring Electrical Energy Quantities, SLPs are needed by consumers for whom Electrcity Distribution Companies (EDC) do not have the obligation to install and maintain devices for hourly electricity commercial metering for any settlement period (currently in Bulgaria – every hour; in other markets there are shorter intervals). This refers to LV non-household customer sites consuming up to 100 kWh of power provided, and also for households.

In Bulgaria, standard load profile application started at the beginning of April 2016.

What are SLPs all about?

SLPs represent a set of coefficients, which describe consumer behaviour model (load profile) of a class of consumers within a certain period of time, or in other words – how is electricity consumption distributed over time.

Consumer classes are predefined. For instance: Households; Business with intensive evening consumption; Business with intensive daily consumption; Street lighting, etc.

A load profile is drawn up for every class over a particular period of time. This profile is defined as a SLP for all consumers in a given class and is published. 2020 SLPs may be seen in the web-pages of Electricity Distribution Companies (CEZ Razpredelenie Bulgaria, Elektrorazpredelenie Yug, Elektrorazpredelenie Sever).

Drawing up an SLP for 24 hours alone is not enough, since the consumption profile changes under the influence of various factors, depending on the season (winter, summer, transition period), on the calendar day (working day, Saturday, Sunday, public holiday), etc. Via dynamic SLP coefficients, model profiles are additionally adapted to various parameters, for instance, external temperature, public holidays, etc.

Who is using SLPs?

In principle, SLPs are used by the majority of utility companies. They conduct ‘profile surveys’ by measuring interval consumption of example customer groups or segments, and the results obtained serve to present the consumption model in the respective segment, mainly for marketing purposes, tariff design, systemic planning and load profiling.

Along with that, SLPs serve electricity suppliers to draft electricity request schedules – SLPs are an effective aid to estimate customer consumption in the process of settlement calculation for the purposes of energy market balance.

What is the benefit?

SLPs development and application is among the tools with proven advantages in the process of successful service delivery and management of customer transition from a ‘buying-selling’ regulated market to a trade in a free market. SLPs benefits are two-dimensional: first, consumers are saved the costs to replace existing metering devices; second, SLPs provide access to the free market because they offer an effective way to estimate customer consumption, which is necessary in view of need to balance the electricity market.

What SLPs are not?

All of the above indicates that SLPs:

Do not replace electrometer readings, which will continue to be used for consumption reporting and invoicing of the respective customers; customers will continue paying their electricity bills on the basis of the meter readings and in accordance with the tariff and supply conditions negotiated with their supplier
Do not represent a new tariff, a new price offer or a package deal
Are not subject of trade, neither are an object of competition between market players, and respectively, SLPs bearer is neither the end-supplier, nor the trader, nor any other supplier

What is the procedure for SLPs provision to non-household consumers?

SLPs are provided by the electricity distribution company (distribution network operator), operating the network to which the respective customer is connected, without an hourly measurement as a ‘ticket’ for customer’s first entry into the free market. The operator selects the most suitable SLP for the customer on the basis of statistical data available for the individual consumer profile. SLP provision enters into force from the date of supplier change.

And what are 2020 SLPs for non-household consumers?

SLPs are determined by distribution network operators and are applicable to consumers connected to the network on the operator’s licenced territory (see links to the respective web-pages given above).

For example, Elektrorazpredeleni Yug has developed SLPs for six classes of non-household consumers located on its licenced territory:

Are there ‘expensive’ SLPs and ‘cheep’ SLPs?

It is clear, in principle, that electricity retail prices mirror the wholesale market dynamics. It is also clear that wholesale prices change on hourly basis and just like in any product markets, these price levels are determined basically by demand and supply. In the hours of the highest (peak) demand, the prices are the highest. And vice versa, in the hours of the lowest demand (usually at night), prices are the lowest. In standard markets this dependency is mitigated via the possibility to store (stock-pile) the respective products. With electricity this possibility is practically non-existent and for that reason price differences between peak and off-peak hours is of considerable importance.

That is how we come up with the answer to the question whether there are ‘expensive’ and ‘cheep’ SLPs.

Yes, there are! SLPs with intensive consumption in the peak periods lead to a higher electricity average (weighted average) price, while SLPs with intensive consumption in the off-peak hours result in the lowest price compared to the other consumer classes.

A case study

Let us go back to the 2020 SLPs of Elektrorazpredelenie Yug. Here is how the standard consumption in G1, G2 and G3 SLPs looks like in a working day.

Consumers in G1 have a considerable consumption in both the morning and evening peaks of electricity demand/consumption. Consumers in G2 miss the morning peak, while G3 miss peak load all together. This predefines the price differences.

Let us assume that the retailer buys electricity for its customers from the electricity exchange (day-ahead market). Calculations based on the actual hourly prices for a month (October 2019) show the following:

SLP with the highest monthly price of BGN 0.123/kWh is G1
Second score with a monthly price of BGN 0.115/kWh is G2
SLP with the lowest price of BGN 0.102/kWh is G3

Therefore, for supplying non-household consumers with intensive daily consumption, the retailer will be buying electricity at a price higher by BGN 0.021/kWh or 20% more expensive electricity than for non-household consumers with intensive night consumption. Respectively, for those with intensive evening consumption, the electricity will be about 13% more expensive.