Support for Household Prosumers in the Early Stages of Power Market Decentralization in Ukraine

Man Zhou (), Uliana Pysmenna, Oleksandra Kubatko, Volodymyr Voloshchuk, Iryna Sotnyk and Galyna Trypolska
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Man Zhou: School of Accounting and Finance, Xi’an Peihua University, Xi’an 710071, China
Uliana Pysmenna: Department of Economics and Entrepreneurship, Faculty of Management and Marketing, National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”, 03056 Kyiv, Ukraine
Oleksandra Kubatko: Department of Economics, Entrepreneurship and Business Administration, Institute of Business, Economics and Management, Sumy State University, 40007 Sumy, Ukraine
Volodymyr Voloshchuk: Department of Economics and Entrepreneurship, Faculty of Management and Marketing, National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute”, 03056 Kyiv, Ukraine
Iryna Sotnyk: Department of Economics, Entrepreneurship and Business Administration, Institute of Business, Economics and Management, Sumy State University, 40007 Sumy, Ukraine
Galyna Trypolska: State Institution “Institute for Economics and Forecasting, NAS of Ukraine”, 01011 Kyiv, Ukraine

Energies, 2023, vol. 16, issue 17, 1-15

Abstract: This paper aims to reconsider prosumers’ role in the power markets in the early stages of their decentralization, accounting for rising self-supply trends, security threats, and economic and regulatory barriers. The development of prosumerism envisages finding the ratio between retail market sales under the feed-in tariff and the net billing mechanism. Within the methodology section, the indicator of prosumer efficiency for electricity generation (EUR/kWh) is proposed based on average consumption/production ratios and consumption/delivery incentives. To support household prosumers, the mentioned incentives on the renewable energy market consider the self-supply cost of electricity, the levelized cost of electricity for small-scale green energy facilities (solar photovoltaic and wind), and transaction costs. This paper evaluates prosumer efficiency under three consumption/production ratio scenarios for Ukrainian households (self-consumption of 40%, 20%, and 100% of green electricity annually generated by a household and selling the leftovers via the feed-in tariff) for 2023. The gradual movement from fixed tariffs for households toward market-based prices promotes the emergence of new related market players and their consolidation in the market. Participation in the organized power market segments is relevant for day-ahead market prices above 130 EUR/MWh, disregarding the households’ tariff rate. The low price caps inhibit the prosumer’s participation in the market, while the transition from the feed-in tariff to net billing significantly promotes their development only under high price caps.

Keywords: prosumers; incentives; net billing; externalities; day-ahead market; local flexibility markets (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:16:y:2023:i:17:p:6365-:d:1231568

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