Date: 2018
Type: Working Paper
Least-cost distribution network tariff design in theory and practice
Working Paper, EUI RSCAS, 2018/19, Florence School of Regulation, Energy
SCHITTEKATTE, Tim, MEEUS, Leonardo, Least-cost distribution network tariff design in theory and practice, EUI RSCAS, 2018/19, Florence School of Regulation, Energy - https://hdl.handle.net/1814/53804
Retrieved from Cadmus, EUI Research Repository
In this paper a game-theoretical model with self-interest pursuing consumers is introduced to assess how to design a least-cost distribution tariff under two constraints that regulators typically face. The first constraint is related to difficulties regarding the implementation of cost-reflective tariffs. In practice, so-called cost-reflective tariffs are only a proxy for the actual cost driver(s) in distribution grids. The second constraint has to do with fairness. There is a fear that active consumers investing in distributed energy resources (DER) might benefit at the expense of passive consumers. We find that both constraints have a significant impact on the least-cost network tariff design, and the results depend on the state of the grid. If most of the grid investments still have to be made, passive and active consumers can both benefit from cost-reflective tariffs, while this is not the case for passive consumers if the costs are mostly sunk.
Cadmus permanent link: https://hdl.handle.net/1814/53804
ISSN: 1028-3625
Series/Number: EUI RSCAS; 2018/19; Florence School of Regulation; Energy
Keyword(s): Batteries Distributed energy adoption Distribution network tariff design Game-theory Non-cooperative behaviour C7 D61 L94 L97 Q41 Q42
Published version: https://hdl.handle.net/1814/69762