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Network tariff design with prosumers and electromobility: Who wins, who loses?

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  • Hoarau, Quentin
  • Perez, Yannick

Abstract

Distributed Energy Resources (DERs), mostly in the form of solar photovoltaic (PV) or lithium-ion batteries, and electric vehicles (EVs) are emerging as three disruptive innovations in power grids. Recent studies have pointed out the potential synergies between these technologies, while others have studied the difficulty to design adequate network tariff when some consumers can adopt DERs (prosumers). In this paper, we investigate the combined effect of DERs and EVs on grid cost recovery. To study these effects, we formulate a non-cooperative game between a regulator that sets tariffs to recover grid costs and the four classes of network users depending on whether they are prosumer (resp. EV owners) or not. We study how tariff structures and the levels of EV penetration and prosuming affect tariffs. First, we find that grid cost recovery concerns caused by load-defecting prosumers installing DER can be balanced by the diffusion of EVs in the network. Second, we highlight that EVs and DERs adoptions are conflicting through the network tariff design. In particular, we find that the more a tariff structure gives incentives for DERs, the less beneficial it is for EVs.

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  • Hoarau, Quentin & Perez, Yannick, 2019. "Network tariff design with prosumers and electromobility: Who wins, who loses?," Energy Economics, Elsevier, vol. 83(C), pages 26-39.
    • Handle: RePEc:eee:eneeco:v:83:y:2019:i:c:p:26-39
    DOI: 10.1016/j.eneco.2019.05.009
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    3. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2021. "Rate design with distributed energy resources and electric vehicles: A Californian case study," Energy Economics, Elsevier, vol. 102(C).
    4. Matthew Gough & Sérgio F. Santos & Mohammed Javadi & Rui Castro & João P. S. Catalão, 2020. "Prosumer Flexibility: A Comprehensive State-of-the-Art Review and Scientometric Analysis," Energies, MDPI, vol. 13(11), pages 1-32, May.
    5. Arlt, Marie-Louise & Astier, Nicolas, 2023. "Do retail businesses have efficient incentives to invest in public charging stations for electric vehicles?," Energy Economics, Elsevier, vol. 124(C).
    6. Qiu, Yueming Lucy & Wang, Yi David & Iseki, Hiroyuki & Shen, Xingchi & Xing, Bo & Zhang, Huiming, 2022. "Empirical grid impact of in-home electric vehicle charging differs from predictions," Resource and Energy Economics, Elsevier, vol. 67(C).
    7. Nouicer, Athir & Meeus, Leonardo & Delarue, Erik, 2023. "Demand-side flexibility in distribution grids: Voluntary versus mandatory contracting," Energy Policy, Elsevier, vol. 173(C).
    8. Nicolás Morell Dameto & José Pablo Chaves-Ávila & Tomás Gómez San Román, 2020. "Revisiting Electricity Network Tariffs in a Context of Decarbonization, Digitalization, and Decentralization," Energies, MDPI, vol. 13(12), pages 1-21, June.
    9. Vaughan, Jim & Doumen, Sjoerd C. & Kok, Koen, 2023. "Empowering tomorrow, controlling today: A multi-criteria assessment of distribution grid tariff designs," Applied Energy, Elsevier, vol. 341(C).
    10. Lyu, Yuan & He, Yongxiu & Zhou, Jinghan & Xie, Yuxin, 2023. "Prosumer standby fee design: Solving the inequity problem of China's county-wide photovoltaic project promotion," Renewable Energy, Elsevier, vol. 207(C), pages 309-320.
    11. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2020. "Coupling small batteries and PV generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    12. Hennig, Roman J. & Ribó-Pérez, David & de Vries, Laurens J. & Tindemans, Simon H., 2022. "What is a good distribution network tariff?—Developing indicators for performance assessment," Applied Energy, Elsevier, vol. 318(C).
    13. Morell-Dameto, Nicolás & Chaves-Ávila, José Pablo & Gómez San Román, Tomás & Schittekatte, Tim, 2023. "Forward-looking dynamic network charges for real-world electricity systems: A Slovenian case study," Energy Economics, Elsevier, vol. 125(C).
    14. Askeland, Magnus & Backe, Stian & Bjarghov, Sigurd & Korpås, Magnus, 2021. "Helping end-users help each other: Coordinating development and operation of distributed resources through local power markets and grid tariffs," Energy Economics, Elsevier, vol. 94(C).
    15. Yamamoto, Yoshihiro, 2021. "A bidirectional payment system for mitigating the supply–demand imbalance among prosumers based on the core of coalitional game theory under the enhanced use of renewable energy," Energy Economics, Elsevier, vol. 96(C).
    16. Khan, Hafiz Anwar Ullah & Ünel, Burçin & Dvorkin, Yury, 2023. "Electricity Tariff Design via Lens of Energy Justice," Omega, Elsevier, vol. 117(C).
    17. Manfren, Massimiliano & Nastasi, Benedetto & Tronchin, Lamberto & Groppi, Daniele & Garcia, Davide Astiaso, 2021. "Techno-economic analysis and energy modelling as a key enablers for smart energy services and technologies in buildings," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).
    18. Hendam, Mohamed & Schittekatte, Tim & Abdel-Rahman, Mohamed & Kamh, Mohamed Zakaria, 2022. "Rethinking electricity rate design: Fostering the energy transition in North Africa," Energy Policy, Elsevier, vol. 169(C).
    19. Schwab, Julia & Sölch, Christian & Zöttl, Gregor, 2022. "Electric Vehicle Cost in 2035: The impact of market penetration and charging strategies," Energy Economics, Elsevier, vol. 114(C).
    20. Pedro H. Perico E Santos & Olivier Massol, 2022. "Electricity Distribution Systems in Europe : An Overview of Contemporary Regulatory Challenges," Working Papers hal-03897936, HAL.

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    More about this item

    Keywords

    Electric vehicle; Prosumers; Distributed energy resources; Tariff design; Distribution grid;
    All these keywords.

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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