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Understanding Tariff Deficit and its Challenges

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  • Espinosa Alejos, María Paz

Abstract

Regulators and market participants have become increasingly concerned about the Spanish electricity tariff deficit due to its size and the difficulties to control its growth. The deficit can be traced to inefficiencies in market organization and solutions should be designed to mitigate those inefficiencies. Tariff deficits have allowed for the transfer of part of the present costs of electricity services to future consumers, but this situation has reached a limit and a deep revision of regulation in this market cannot be postponed. In general, solutions that interfere with market prices and signals are not appropriate.

Suggested Citation

  • Espinosa Alejos, María Paz, 2013. "Understanding Tariff Deficit and its Challenges," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
    • Handle: RePEc:ehu:dfaeii:10012
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    File URL: https://addi.ehu.es/handle/10810/10012
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    References listed on IDEAS

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    8. Ciarreta Antuñano, Aitor & Espinosa Alejos, María Paz, 2010. "The Impact of Regulation on Pricing Behavior in the Spanish Electricity Market," DFAEII Working Papers 1988-088X, University of the Basque Country - Department of Foundations of Economic Analysis II.
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    Cited by:

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    2. Santiago M. López & Mar Cebrián, 2021. "The Development of Wind Farm Businesses and the Central Control of the Smart Grid in Spain: Making a Virtue of Necessity," Energies, MDPI, vol. 14(20), pages 1-19, October.
    3. López Prol, Javier & Steininger, Karl W., 2017. "Photovoltaic self-consumption regulation in Spain: Profitability analysis and alternative regulation schemes," Energy Policy, Elsevier, vol. 108(C), pages 742-754.

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    Keywords

    regulated activities; energy policy; electricity market; renewable energy;
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