Tempo Electricity Tariff – France
This is the 11th article in a series highlighting the case studies of DSM Task 15, Network Driven DSM. This Task demonstrated that DSM can be successfully used to support electricity networks in two main ways:
1) by relieving constraints on distribution and/ or transmission networks at lower costs than building ‘poles and wires’ solutions, and
2) by providing services for electricity network system operators, achieving peak load reductions with various response times for network operational support.
In France, electricity bills for residential and small business customers include a standing charge determined by the level of maximum demand (in kVA) nominated by the customer (puissance souscrite), and an energy usage charge based on the type of tariff chosen by the customer (type d’abonnement). There are three types of electricity contract from which residential and small business customers can choose.
Option Base is suitable for lower usage, smaller homes and holiday homes with only occasional usage. This is the simplest of the three contract types with the lowest standing charge and a flat rate for electricity usage all the time throughout the day and year.
Option Heures Creuses (Option HC)
Option HC suits the majority of houses occupied full-time where heating is non-electric.
This is a two-part time-of-use tariff with normal (heures pleines) and off-peak (heures creuses) rates. The standing charge is slightly higher than that of Option Base, but this is offset against a lower off-peak rate for part of the day. The off-peak period is from 10 pm until 6 am each night and, in some regions, also at midday. Option HC is usually used in conjunction with a water heater operated by ripple control so that the heating element is switched on only during off-peak periods.
Option Tempo is for high use households, such as very large houses, and those with electric heating and full-time occupation, and for small business customers.
This is a quite complicated charging system with six rates of electricity pricing based upon the actual weather on particular days and on hours of use. Under Option Tempo, each day of the year is colour coded. There are three colours, blue (jours bleus), white (jours blancs) and red (jours rouges) which correspond to low, medium and high electricity prices.
The colour of each day is determined mostly by the electricity provider Électricité de France (EDF) based on the forecast of electricity demand for that day – the level of demand is mainly influenced by the weather. The French transmission network operator also has the ability to determine the day colour if there is significant congestion on the electricity network.
In addition to a colour, each day also has normal and off-peak periods based on Option HC outlined above, with 10pm until 6am being the off-peak period.
The rules for the Option Tempo are as follows:
- the Tempo year starts on 1st September;
- the Tempo day starts at 6 am;
- the number of days per year of each colour is fixed – there are 300 blue days, 43 white days and 22 red days;
- Sunday is always a blue day;
- red days cannot fall on a holiday or a weekend or on more than five weekdays in a row.
On blue days, the electricity price is by far the lowest – during the off-peak period on a blue day the price is extremely low (see Figure 4, page 27). On
white days, the price is higher than under Option Base or Option HC. On red days, the price is very high to encourage lower electricity usage – the normal
rate on red days is nine times that of the off-peak rate on blue days. Red days are usually the coldest days in winter.
Figure 1. Tempo Tariff Rates in France from 18 August 2010
There are four different versions of Option Tempo, depending on the metering, communications and load control equipment installed at the customer’s premises:
- standard Tempo (the customer has only an electronic interval meter);
- dual energy Tempo (the customer’s space-heating boiler can be switched from one energy source to another);
- thermostat tempo (the customer has load control equipment which is able to adjust space heating and water heating loads according to the electricity price);
- comfort Tempo (the customer has a sophisticated energy controller).
Customers who choose Option Tempo are informed each night about the colour for the next day. At 8 pm a signal is sent down power lines using a ripple control system. Most Tempo customers have a display unit that plugs into any power socket and picks up the signal. The display unit shows the day colour with lights, both for the current day and (from 8pm) for the next day. An (optional) beep informs the consumer if the following day will be a red day. The display unit also shows whether or not the current electricity price is at the off-peak rate. For older systems without a display unit the information is available over the telephone or via the internet.
Customers can adjust their electricity consumption manually by switching off appliances, adjusting thermostat settings, etc. Some customers who have the necessary communications and load control equipment are able to select load control programs which enable automatic connection and disconnection of separate water-heating and space-heating circuits.
Figure 2. Tempo Customer Power Demand vs Outdoor Temperature
Figure 2 shows that, compared with blue days, the Tempo tariff has led to a reduction in electricity consumption of 15% on white days and 45% on red days, on average 1 kW per customer. Tempo customers have saved 10% on average on their electricity bill and 90% of the customers are satisfied with the tariff. However, customers do not appreciate red days occurring consecutively.
While the Tempo tariff has been successful, less than 20% of electricity customers in France have chosen Option Tempo. Tempo customers have very particular customer profiles and are interested in managing their energy use. They are prepared to constrain their lifestyles to make comparatively small financial savings relative to their incomes.
The Tempo tariff was designed specifically for the situation where EDF is a monopolistic generator and retailer of electricity. However, it is not adapted to the competitive electricity market which is being introduced in France. In this market:
- the network use of system charge does not vary between seasons; and
- the value of peak load reduction is not reflected in spot prices for energy which are less volatile than the marginal costs of supply.
When EDF needs to manage its global load curve in a competitive electricity market, it will have to develop other types of dynamic pricing for mass market customers. In July 2009, EDF discontinued the Tempo tariff for new customers and for customers who are on the tariff at their current residence and then move house.
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This article was contributed by David Crossley, Managing Director of Energy Futures Australia Pty. Ltd and Senior Advisor at The Regulatory Assistance Project. For more information on this case study and others, visit Task 15, Network Driven DSM at: