Balancing Environmental Incentives and Fairness in Household Electricity Distribution Tariffs

Liang Lu and Catherine Waddams Price
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Liang Lu: Centre for Competition Policy and Norwich Business School, University of East Anglia
Catherine Waddams Price: Centre for Competition Policy and Norwich Business School, University of East Anglia
Authors registered in the RePEc Author Service: Farasat A.S. Bokhari

No 2019-03, Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) from Centre for Competition Policy, University of East Anglia, Norwich, UK.

Abstract: Adapting energy distribution systems to new patterns of energy generation and usage often creates tensions between environmental and equity objectives by challenging traditional distributional arrangements and associated charging methodologies. We discuss the principles of fairness and efficiency which might be applied to designing tariffs for residential consumers with self-generation opportunities, and identify the main examples of charging methodologies used in practice. Based on this experience, we develop a stylised model to simulate the effects of a wide range of tariff designs on households with diverse energy use profiles and ability to self-generate. We observe a clear trade-off between incentives to self-generate and distributional concerns across tariff scenarios and show how a net metering scheme may aggravate the trade-off.

Keywords: Distributed Generation; Electricity; Fairness; Network; Renewables; Tariff (search for similar items in EconPapers)
JEL-codes: D61 L51 L94 L97 Q41 Q42 (search for similar items in EconPapers)
Date: 2019-10-28
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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