Cross subsidies across electricity network users from renewable self-consumption. (August 2019)

• Record Type: Journal Article
• Authors: Clastres, Cédric; Percebois, Jacques; Rebenaque, Olivier; Solier, Boris
• Is Part Of: Utilities policy. Volume 59(2019)
• Publication Date: 2019-08
• Subjects: Self-consumption -- Cross-subsidies -- Network tariff; L94 -- Q42 -- L51; Public utilities -- United States -- Periodicals; Public utilities -- Government policy -- United States -- Periodicals; 363.6
• DOI: 10.1016/j.jup.2019.100925
• Languages: English
• ISSNs: 0957-1787

Abstract

Abstract: The deployment of renewable energies relies upon incentive policies to make their use profitable for the owner. Increasing support for renewables results in rising public service obligation tariffs to fund these policies. Photovoltaic prosumption could help lower the cost of developing renewables but may induce cross-subsidies between prosumers and other users of the network to compensate for the benefits. We show that such cross-subsidies occur but are dependent on the self-consumption rate, which will remain low in the coming years. The regulator could fund these cross-subsidies by increasing the fixed component of the network tariff for prosumers only. Highlights: Photovoltaic-powered self-consumption entails losses for the network operator. Cross-subsidies between consumers restore the network operator's financial balance. The regulator could increase the fixed part of the network tariff to reduce such cross-subsidies. A network-tariff component based on the cost of outages would avoid cross-subsidies.