How future-proof is your distribution grid tariff design?

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dc.contributor.authorSCHITTEKATTE, Tim
dc.contributor.authorMEEUS, Leonardo
dc.date.accessioned2017-04-28T13:43:49Z
dc.date.available2017-04-28T13:43:49Z
dc.date.issued2017
dc.description.abstractThe assumption that people cannot react to the way distribution grid tariffs are designed does not hold anymore. This is mainly true due to breakthroughs in two game-changing technologies: photovoltaics (PV) and batteries. • By investing in PV and batteries, active consumers push the sunk costs towards passive consumers (equity issue). Ironically, the active consumers can even end up paying more (efficiency issue). To avoid being screwed by the others, active consumers could overinvest. They are in a non-cooperative equilibrium. • We find that the outcome of this game between the DSO (and the regulator) trying to recover sunk costs, and active consumers reacting to the distribution grid tariff, depends heavily on the way the tariff is designed. • It is clear that current distribution grid tariffs are not future-proof. The historical conventional practice in the EU is net-metering, which creates significant equity issues and is an implicit subsidy for the adoption of PV. The solution that is advocated in the current debate, capacity charges, creates significant efficiency issues and is an implicit subsidy for the adoption of batteries. • ‘Bi-directional’ volumetric charges can outperform capacity based charges to recover sunk costs, so they should at least be considered as an option.en
dc.format.mimetypeapplication/pdf
dc.identifier.doi10.2870/27688
dc.identifier.isbn9789290844648
dc.identifier.issn2467-4540
dc.identifier.urihttps://hdl.handle.net/1814/46205
dc.language.isoen
dc.relation.ispartofseriesPolicy Briefsen
dc.relation.ispartofseries2017/03en
dc.relation.ispartofseriesFlorence School of Regulationen
dc.relation.ispartofseriesEnergyen
dc.relation.ispartofseriesClimateen
dc.relation.urihttp://fsr.eui.eu/
dc.rightsinfo:eu-repo/semantics/openAccess
dc.titleHow future-proof is your distribution grid tariff design?en
dc.typeOtheren
dspace.entity.typePublication
eui.subscribe.skiptrue
person.identifier.orcid0000-0002-7196-0231
person.identifier.orcid0000-0003-1490-816X
person.identifier.other39547
person.identifier.other32778
relation.isAuthorOfPublication57960b5a-88e2-47cb-b97d-3f6202b8a892
relation.isAuthorOfPublicationf2da77f1-d2c6-454f-a1fc-f3fa3f0d7261
relation.isAuthorOfPublication.latestForDiscovery57960b5a-88e2-47cb-b97d-3f6202b8a892
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