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Evaluation Methodology for Tariff Design under Escalating Penetrations of Distributed Energy Resources

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  • Ibtihal Abdelmotteleb

    (Institute for Research in Technology, Comillas Pontifical University, Madrid 28015, Spain
    Faculty of Technology, Policy and Management, Delft University of Technology, Delft 2628, The Netherlands
    Faculty of Electrical and Control Engineering, Arab Academy for Science, Technology and Maritime Transport, Cairo 11361, Egypt)

  • Tomás Gómez

    (Institute for Research in Technology, Comillas Pontifical University, Madrid 28015, Spain)

  • Javier Reneses

    (Institute for Research in Technology, Comillas Pontifical University, Madrid 28015, Spain)

Abstract

As the penetration of distributed energy resources (DERs) escalates in distribution networks, new network tariffs are needed to cope with this new situation. These tariffs should allocate network costs to users, promoting an efficient use of the distribution network. This paper proposes a methodology to evaluate and compare network tariff designs. Four design attributes are proposed for this aim: (i) network cost recovery; (ii) deferral of network reinforcements; (iii) efficient consumer response; (iv) recognition of side-effects on consumers. Through an analytical hierarchy process (AHP), the evaluation methodology is applied to compare traditional cost allocation methods, on the basis of 100% energy, 100% demand, and 50% energy-50% demand, with more advanced pricing methods based on distribution locational marginal prices in combination with cost-reflective network charges. Numerical results are obtained through a case study based on the IEEE 34-node test feeder with DER integration. The results illustrate the advantage of advanced pricing methods to promote an efficient integration of DER and demand price-response from consumers.

Suggested Citation

  • Ibtihal Abdelmotteleb & Tomás Gómez & Javier Reneses, 2017. "Evaluation Methodology for Tariff Design under Escalating Penetrations of Distributed Energy Resources," Energies, MDPI, vol. 10(6), pages 1-16, June.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:6:p:778-:d:100587
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    References listed on IDEAS

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    2. Heider, Anya & Huber, Jill & Farhat, Yamshid & Hertig, Yves & Hug, Gabriela, 2024. "How to choose a suitable network tariff? - Evaluating network tariffs under increasing integration of distributed energy resources," Energy Policy, Elsevier, vol. 188(C).
    3. Simeone, Christina E. & Gagnon, Pieter & Cappers, Peter & Satchwell, Andrew, 2023. "The bill alignment test: Identifying trade-offs with residential rate design options," Utilities Policy, Elsevier, vol. 82(C).
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    5. Jessica Thomsen & Christoph Weber, "undated". "How the design of retail prices, network charges, and levies affects profitability and operation of small-scale PV-Battery Storage Systems," EWL Working Papers 1903, University of Duisburg-Essen, Chair for Management Science and Energy Economics.

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