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Designing grid tariffs in the presence of distributed generation

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  • Cambini, Carlo
  • Soroush, Golnoush

Abstract

In recent years, an increasing number of electricity consumers have decided to become prosumers. Prosumers can introduce both environmental and social benefits, as well as various utility and regulatory challenges. Utilities and regulators need to either update the current compensation systems and tariff structures or to develop new ones to account for the impact imposed on distribution system operators (DSOs) due to a high penetration rate of distributed generators (DGs), including costs related to connecting DG prosumers to the grid. The goal of this paper is to introduce and examine a novel, multi-part tariff structure that accounts for these costs under the net metering mechanism. Our results show that by applying a multi-part tariff for prosumers, which includes a fixed component that reflects recurring grid-connection costs together with a variable component that reflects the net effect on operating cost of distribution networks, it is possible to alleviate the drawbacks of net metering and optimize prosumption.

Suggested Citation

  • Cambini, Carlo & Soroush, Golnoush, 2019. "Designing grid tariffs in the presence of distributed generation," Utilities Policy, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:juipol:v:61:y:2019:i:c:s0957178719303327
    DOI: 10.1016/j.jup.2019.100979
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    References listed on IDEAS

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    2. Agostini, Marco & Bertolini, Marina & Coppo, Massimiliano & Fontini, Fulvio, 2021. "The participation of small-scale variable distributed renewable energy sources to the balancing services market," Energy Economics, Elsevier, vol. 97(C).
    3. Javier Borquez & Hector Chavez & Karina A. Barbosa & Marcela Jamett & Rodrigo Acuna, 2020. "A Simple Distribution Energy Tariff under the Penetration of DG," Energies, MDPI, vol. 13(8), pages 1-17, April.
    4. Barbara Antonioli Mantegazzini & C?dric Clastres & Laura Wangen, 2022. "Energy communities in Europe: An overview of issues and regulatory and economic solutions," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2022(2), pages 5-23.
    5. Cambini, Carlo & Congiu, Raffaele & Jamasb, Tooraj & Llorca, Manuel & Soroush, Golnoush, 2020. "Energy Systems Integration: Implications for public policy," Energy Policy, Elsevier, vol. 143(C).
    6. 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).
    7. Dahiana López García & José David Beltrán Gallego & Sandra Ximena Carvajal Quintero, 2023. "Proposing Dynamic Pricing as an Alternative to Improve Technical and Economic Conditions in Rural Electrification: A Case Study from Colombia," Sustainability, MDPI, vol. 15(10), pages 1-24, May.
    8. Carlo Cambini & Raffaele Congiu & Golnoush Soroush, 2020. "Regulation, Innovation, and Systems Integration: Evidence from the EU," Energies, MDPI, vol. 13(7), pages 1-18, April.
    9. Johansson, Petter & Vendel, Martin & Nuur, Cali, 2020. "Integrating distributed energy resources in electricity distribution systems: An explorative study of challenges facing DSOs in Sweden," Utilities Policy, Elsevier, vol. 67(C).
    10. Venkatraman, Athindra & Thatte, Anupam A. & Xie, Le, 2021. "A smart meter data-driven distribution utility rate model for networks with prosumers," Utilities Policy, Elsevier, vol. 70(C).
    11. D'Adamo, Idiano & Gastaldi, Massimo & Morone, Piergiuseppe, 2022. "The impact of a subsidized tax deduction on residential solar photovoltaic-battery energy storage systems," Utilities Policy, Elsevier, vol. 75(C).
    12. 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

    Distributed generation; Grid tariffs; Net metering pricing scheme;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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