Grid Fee Objectives

Grid operators (Distribution and Transmission System Operators - DSOs and TSOs - or Independent System Operators - ISOs in the USA) are tasked to monitor and manage the electrical grid. It is their responsibility to ensure a connection for end-users on the distribution network along with energy transport security. Grid operators use grid fees to cover the cost of managing their grid infrastructure. Lately, due to the heightened pace of innovation, increased demand and investment in distributed energy resources (DERs), grid operators face many challenges, such as lines and transformers congestion at specific times of the day. One solution is to use grid fees as a tool to actively manage grid congestion by increasing and reducing the fee during the day, week or year. Increasing the fee at peak transmission and reducing the price during off-peak periods makes it financially attractive for end-users to use flexible energy assets (e.g. batteries, EVs, heat-pumps) to provide demand response services and reduce reliance on the grid.

Grid Singularity offers an environment to simulate, test and optimize grid fee incentives for local energy markets (LEMs) At the moment grid fee can be set as :

  • Market Fee: This is a fee that is added to each trade that is cleared. The buyer of energy is responsible for paying all the grid fees: bid’s price >= offer’s price + grid fee.

The following article explains how flexible grid fees may be implemented towards peak reduction.

For a video tutorial on how to set grid fees in the Grid Singularity exchange engine, please follow this link.