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Future-proof tariff design: Recovering sunk grid costs in a world where consumers are pushing back
Schittekatte, Tim ; Momber, Ilan ; Meeus, Leonardo
Schittekatte, Tim
Momber, Ilan
Meeus, Leonardo
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2018
Journal
Energy Economics
Book
Publication Volume
70
Publication Issue
February
Publication Begin page
484
Publication End page
498
Publication NUmber of pages
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Abstract
Traditional analysis of distribution network tariff design assumes a lack of alternatives to grid connection for the fulfilment of consumers' electricity needs. This is radically changing with breakthroughs in two technologies: (1) Photovoltaics (PV) enable domestic and commercial consumers to self-produce energy; (2) Batteries allow consumers and self-producers to gain control over their grid energy and capacity parameters. Contributing to the state of the art, the grid cost recovery problem for the Distribution System Operator (DSO) is modelled as a non-cooperative game between consumers. In this game, the availability and costs of the two named technologies strategically interact with tariff structures. Four states of the world for user's access to technologies are distinguished and three tariff structures are evaluated. The assessed distribution network tariff structures are: energy volumetric charges with net-metering, energy volumetric charges for both injection and withdrawal, and capacity-based charges. Results show that in a state of the world with new technology choices for grid users both efficiency and equity issues can arise when distribution network charges are ill-designed.
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Keywords
Batteries, Distribution Network Tariff, Non-cooperative Behaviour, Optimisation, Photovoltaics