Prosumers and energy pricing policies: When, where, and under which conditions will prosumers emerge? A case study for Ontario (Canada)

Elizaveta Kuznetsova and Miguel F. Anjos

Energy Policy, 2021, vol. 149, issue C

Abstract: There has recently been a rapid emergence of electricity prosumers at all levels of the grid. However, the skepticism about the feasibility and profitability of their physical disconnection remains. This paper contributes to the exploration of these issues by analyzing the impact of billing policy on the profitability of investment in prosumer schemes in Ontario (Canada). We conclude that the recent fast improvement in commercial storage technologies has made it possible for prosumers to become fully electricity self-sufficient even in locations with high electricity consumption and low availability of renewable energy sources. Among the three options of remaining a conventional consumer, switching to Net Metering or going Off-grid, Off-grid is the least attractive for investment in 2019. However, by 2030 Off-grid gains significant value, and for some locations it becomes even the first or the second most attractive option. Sensitive locations where disconnection is more profitable are characterized by a high share of fixed costs in the total electricity bill. In such locations, it is no longer attractive to remain a conventional consumer in 2030. If the annual bill increase goes beyond 4% and the decreasing trends in the cost of technologies are maintained, Off-grid will become profitable by 2030.

Keywords: Energy policy; Variable and fixed costs; Net metering; Off-grid scheme; Electricity prosumer; Profitability (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:149:y:2021:i:c:s0301421520306935

DOI: 10.1016/j.enpol.2020.111982

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