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Cross subsidies across network users: renewable self-consumption

Cédric Clastres, Jacques Percebois, Olivier Rebenaque and Boris Solier

Working Papers from Chaire Economie du climat

Abstract: The deployment of renewable energies relies upon incentive policies to make their use profitable for owner. However, their development needs adjustments of network to manage intermittency and additional energy fed into the grid. Moreover, the Public Service Obligation Tariffs (PSOT) are increasing to fund policies that support renewable energy deployment. Therefore, some decisions are taken to promote self-consumption by owners of renewable energy power plants, as photovoltaic prosumers. This behavior is encouraged by payment exemptions of PSOT, special tariffs dedicated to remunerate each self-consumed energy unit or savings on the variable part of the network tariff. Thus, some cross-subsidies appear between self-consumers and other users of the network to compensate all these previous self-consumers’ gains. We show that these cross-subsidies occur but they strongly rely on self-consumption rate and on renewable energy share in the total produced or consumed energy. So, currently, the levels of cross-subsidies are not significant for consumers. We also show that regulator could fund these cross-subsidies increasing the fixed part of the network tariff for prosumers.

Keywords: Self-consumption; Cross-subsidies; Network tariff; Policy instrument (search for similar items in EconPapers)
JEL-codes: L94 Q42 L51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-reg
Date: 2018
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http://www.chaireeconomieduclimat.org/RePEc/cec/wp ... Rebenaque-Solier.pdf First version, 2018 (application/pdf)

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