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The prosumers and the grid

Author

Listed:
  • Axel Gautier

    (University of Liege
    UCL
    CESifo)

  • Julien Jacqmin

    (University of Liege)

  • Jean-Christophe Poudou

    (University of Montpellier)

Abstract

Prosumers are households that are both producers and consumers of electricity. A prosumer has a grid-connected decentralized production unit and makes two types of exchanges with the grid: energy imports when the local production is insufficient to match the local consumption and energy exports when local production exceeds it. There exists two systems to measure the exchanges: a net metering system that uses a single meter to measure the balance between exports and imports and a net purchasing system that uses two meters to measure separately power exports and imports. Both systems are currently used for residential consumption. We build a model to compare the two metering systems. Under net metering, the price of exports paid to prosumers is implicitly set at the price of the electricity that they import. We show that net metering leads to (1) too many prosumers, (2) a decrease in the bills of prosumers, compensated via a higher bill for traditional consumers, and (3) a lack of incentives to synchronize local production and consumption.

Suggested Citation

  • Axel Gautier & Julien Jacqmin & Jean-Christophe Poudou, 2018. "The prosumers and the grid," Journal of Regulatory Economics, Springer, vol. 53(1), pages 100-126, February.
    • Handle: RePEc:kap:regeco:v:53:y:2018:i:1:d:10.1007_s11149-018-9350-5
    DOI: 10.1007/s11149-018-9350-5
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    More about this item

    Keywords

    Decentralized production unit; Grid regulation; Solar panel; Grid tariff; Storage;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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