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Spillover effects of distribution grid tariffs in the internal electricity market: An argument for harmonization?
Govaerts, Niels Bruninx, Kenneth Le Cadre, Hélène Meeus, Leonardo Delarue, Erik
Govaerts, Niels
Bruninx, Kenneth
Le Cadre, Hélène
Meeus, Leonardo
Delarue, Erik
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2019
Journal
Energy Economics
Book
Publication Volume
84
Publication Issue
October
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Publication End page
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Abstract
In many countries, distribution grid tariffs are being reformed to adapt to the new realities of an electricity system with distributed energy resources. In Europe, legislative proposals have been made to harmonize these reforms across country borders. Many stakeholders have argued that distribution tariffs are a local affair, while the European institutions argued that there can be spillovers to other countries, which could justify a more harmonized approach. In this paper, we quantify these spillovers in a simplified numerical example to give insight and an order of magnitude. We look at different scenarios, and find that the spillovers can be both negative and positive. To be able to quantify these effects, we developed a long-run market equilibrium model that captures the wholesale market effects of distribution grid tariffs. The problem is formulated as a non-cooperative game involving consumers, generating companies and distribution system operators in a stylized electricity market.
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Keywords
Distribution Grid Tariff Design, Distributed Energy Resources, Non-cooperative Game, Energy Policy, Spillovers