The benefits of off-peak midday electricity tariffs for large customers: Perspective on Australia's National Electricity Market

This perspective describes the opportunities of reforming commercial and industrial (C&I) customer network tariffs to encourage demand shifting and response in Australia's National Electricity Market. With retail tariffs heavily influenced by their underlying network tariffs, we find that many network service providers only offer archaic network tariff structures that may not reflect their long-run marginal cost while counteracting wholesale market price signals. We argue that reclassifying midday hours as ‘off-peak’ for time-of-use and demand charges by distribution networks (assuming these are subsequently reflected in C&I retail tariffs) could result in lower wholesale market prices, increased system stability via reductions in the duck-curve, and enhanced efficiency in resource allocation. The findings suggest that electricity tariff reform, especially in states with high levels of variable renewable energy (such as South Australia and Victoria), should be encouraged to facilitate sustainable energy transitions in Australia.