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Analysis of reflectivity & predictability of electricity network tariff structures for household consumers

M. Nijhuis, M. Gibescu and J.F.G. Cobben

Energy Policy, 2017, vol. 109, issue C, 631-641

Abstract: Distribution network operators charge household consumers with a network tariff, so they can recover their network investment and operational costs. With the transition; towards a sustainable energy system, the household load is changing, through the introduction of photovoltaics and electric vehicles. The tariff structures which are currently employed in the EU are either capacity and/or energy consumption based. In light of the changes in the household load the question whether these tariff structures are the most suitable merits renewed attention. In this work, the cost-reflectivity of various tariff structures has been computed based on a distribution network planning approach. Next to this, the predictability of a network tariff, i.e. how much change would a household experience in network charges in two consecutive years has also been computed to gain insight into how well users will be able to react to the tariff. The results show that a peak load based network tariffs score best on the reflectivity while having an acceptable level of predictability. The switch from an energy consumption based network tariff, which is now most often applied, towards a peak load based network tariff should therefore, be considered.

Keywords: Distribution network tariff; Capacity tariffs; Distribution network economics; Cost-reflectivity (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:enepol:v:109:y:2017:i:c:p:631-641