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Cross subsidies across electricity network users from renewable self-consumption

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  • Clastres, Cédric
  • Percebois, Jacques
  • Rebenaque, Olivier
  • Solier, Boris

Abstract

The deployment of renewable energies relies upon incentive policies to make their use profitable for the owner. Increasing support for renewables results in rising public service obligation tariffs to fund these policies. Photovoltaic prosumption could help lower the cost of developing renewables but may induce cross-subsidies between prosumers and other users of the network to compensate for the benefits. We show that such cross-subsidies occur but are dependent on the self-consumption rate, which will remain low in the coming years. The regulator could fund these cross-subsidies by increasing the fixed component of the network tariff for prosumers only.

Suggested Citation

  • Clastres, Cédric & Percebois, Jacques & Rebenaque, Olivier & Solier, Boris, 2019. "Cross subsidies across electricity network users from renewable self-consumption," Utilities Policy, Elsevier, vol. 59(C), pages 1-1.
    • Handle: RePEc:eee:juipol:v:59:y:2019:i:c:1
    DOI: 10.1016/j.jup.2019.100925
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    Citations

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    Cited by:

    1. Ademulegun, Oluwasola O. & Keatley, Patrick & Agbonaye, Osaru & Moreno Jaramillo, Andres F. & Hewitt, Neil J., 2020. "Towards a sustainable electricity grid: Market and policy for demand-side storage and wind resources," Utilities Policy, Elsevier, vol. 67(C).
    2. Gautier, Axel & Jacqmin, Julien & Poudou, Jean-Christophe, 2021. "Optimal grid tariffs with heterogeneous prosumers," Utilities Policy, Elsevier, vol. 68(C).
    3. Olivier Rebenaque, 2020. "An economic assessment of the residential PV self-consumption support under different network tariffs," Working Papers hal-02511136, HAL.
    4. Ansarin, Mohammad & Ghiassi-Farrokhfal, Yashar & Ketter, Wolfgang & Collins, John, 2020. "The economic consequences of electricity tariff design in a renewable energy era," Applied Energy, Elsevier, vol. 275(C).
    5. Gjorgievski, Vladimir Z. & Cundeva, Snezana & Georghiou, George E., 2021. "Social arrangements, technical designs and impacts of energy communities: A review," Renewable Energy, Elsevier, vol. 169(C), pages 1138-1156.
    6. Yihsu Chen & Andrew L. Liu & Makoto Tanaka & Ryuta Takashima, 2022. "Optimal Retail Tariff Design with Prosumers: Pursuing Equity at the Expenses of Economic Efficiencies?," Papers 2209.14505, arXiv.org.
    7. Olivier Rebenaque, 2020. "An economic assessment of the residential PV self-consumption support under different network tariffs," Working Papers 2001, Chaire Economie du climat.
    8. Manuel de Villena, Miguel & Jacqmin, Julien & Fonteneau, Raphael & Gautier, Axel & Ernst, Damien, 2021. "Network tariffs and the integration of prosumers: The case of Wallonia," Energy Policy, Elsevier, vol. 150(C).
    9. Olivier Rebenaque & Carlo Schmitt & Klemens Schumann, 2022. "Trading in local markets: A review of concepts and challenges," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2022(2), pages 25-47.
    10. Felice, Alex & Rakocevic, Lucija & Peeters, Leen & Messagie, Maarten & Coosemans, Thierry & Ramirez Camargo, Luis, 2022. "Renewable energy communities: Do they have a business case in Flanders?," Applied Energy, Elsevier, vol. 322(C).
    11. Ahmed S. Alahmed & Lang Tong, 2021. "On Net Energy Metering X: Optimal Prosumer Decisions, Social Welfare, and Cross-Subsidies," Papers 2109.09977, arXiv.org, revised Jan 2022.
    12. Junhyung Kim & Keon Baek & Eunjung Lee & Jinho Kim, 2023. "Analysis of Net-Metering and Cross-Subsidy Effects in South Korea: Economic Impact across Residential Customer Groups by Electricity Consumption Level," Energies, MDPI, vol. 16(2), pages 1-14, January.
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    14. Ansarin, Mohammad & Ghiassi-Farrokhfal, Yashar & Ketter, Wolfgang & Collins, John, 2020. "Cross-subsidies among residential electricity prosumers from tariff design and metering infrastructure," Energy Policy, Elsevier, vol. 145(C).

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    More about this item

    Keywords

    Self-consumption; Cross-subsidies; Network tariff;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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