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Design and Impact of Grid Tariffs

Author

Listed:
  • Christian Winzer

    (ZHAW School of Management and Law, Center for Energy and Environment, 8400 Winterthur, Switzerland)

  • Patrick Hensler-Ludwig

    (ZHAW School of Management and Law, Center for Energy and Environment, 8400 Winterthur, Switzerland)

Abstract

We propose a novel grid tariff design proportional to grid load and analyze its performance in comparison to other grid tariff designs with regards to (i) effectiveness, (ii) efficiency, (iii) profitability of technologies and (iv) equity. In the case of a large share of automated loads, time-of-use tariffs and critical peak prices create problematic new rebound peaks. Direct load control and capacity prices can reduce grid load without rebound peaks but are less effective at reducing both grid and energy costs. The novel tariff design proportional to the grid load can reduce both grid and energy costs but needs to be designed appropriately to avoid rebound peaks. Tariff impacts on the profitability of different technologies are more pronounced than equity impacts because households from all income brackets may be equipped with PV and flexible technologies.

Suggested Citation

  • Christian Winzer & Patrick Hensler-Ludwig, 2024. "Design and Impact of Grid Tariffs," Energies, MDPI, vol. 17(6), pages 1-25, March.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:6:p:1364-:d:1355727
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    References listed on IDEAS

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    2. Brown, Toby & Faruqui, Ahmad & Grausz, Léa, 2015. "Efficient tariff structures for distribution network services," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 139-149.
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