Cross subsidies across electricity network users from renewable self-consumption

Abstract

The deployment of renewable energies relies upon incentive policies to make their use profitable for the owner. Increasing costs of renewable support result in rising public service obligation tariffs to fund these policies. The photovoltaic prosumption could help decreasing the cost of developing renewables but induces cross-subsidies between prosumers and other users of the network that may compensate the benefits. We show that such cross-subsidies do occur but are dependent on the selfconsumption rate that will remain low in the coming years. The regulator could fund these crosssubsidies by increasing the fixed part of the network tariff for prosumers only.

Modelling and assessing the impact of the DSO remuneration strategy on its interaction with electricity users

“…The latter work proposes a stylised framework assessing the costs for consumers and prosumers after the deployment of DER installations, in a setting where net-metering is employed, quantifying the difference in costs. This difference in costs may result in cross-subsidies from traditional consumers to DER owners, as shown in [10,16]. In [16], the authors suggest a connection between the self-consumption rate (i.e., the proportion of a prosumer's consumption covered by their own DER installation) and the level of cross-subsidies from consumers to prosumers, in a study focused on France.…”

“…This difference in costs may result in cross-subsidies from traditional consumers to DER owners, as shown in [10,16]. In [16], the authors suggest a connection between the self-consumption rate (i.e., the proportion of a prosumer's consumption covered by their own DER installation) and the level of cross-subsidies from consumers to prosumers, in a study focused on France. A similar observation is made across the Atlantic in [17], where different distribution tariff designs in Texas, US, are assessed, reporting on their impact on the distribution network as a function of the level of cross-subsidisation -proxy for unfairness according to the authors-they induce.…”

Optimal grid tariffs with heterogeneous prosumers

“…We use θ i to denote the variable costs per MWh of power distributed by centralized (i = c) and local exchanges (i = l). 7 To simplify the analysis, we assume that centralized and local energy exchanges have the same variable costs per MWh:…”

“…An additional argument is that that intermittency is a problem at the production stage but not at the distribution stage which is the focus of the analysis. 7 Local exchanges refer to power exchanges between a DPU and other consumers, and centralized exchanges refer to power exchanges between the CPU and consumers/prosumers. the total cost of the DSO is equal to:…”

Network tariffs and the integration of prosumers: The case of Wallonia

“…The self-consumption rate is usually lower for residential households than for commercial activities (Clastres et al, 2019). Moreover, there is a high discrepancy in Wallonia between production and consumption: in the summer months, production is the highest and consumption the lowest and conversely in the winter months.…”