A Simple Distribution Energy Tariff under the Penetration of DG

Abstract

In a scenario where distributed generation infrastructure is increasing, the impact of that integration on electricity tariffs has captured particular attention. As the distribution sector is mainly regulated, tariff systems are defined by the authority. Then, tariffs must be simple, so the methodology, criteria, and procedures can be made public to ensure transparency and responsiveness of the customers to price signals. In the aim of simplicity, tariff systems in current practices mostly consist of volumetric charges. Hence, the reduction of the energy purchased from the distribution network jeopardizes the ability of the tariff system to ensure recovery of the total regulated costs. Although various works have captured this concern, most proposals present significant mathematical complexity, contrasting with the simplicity of current practices and limiting its regulatory applicability. This work develops a tariff system that captures the basic elements of distribution systems, trying to maintain the simplicity of current practices, ensuring recovery of the total regulated cost under the penetration of distributed generation, and incentivizing through price signals operational efficiency. A simulation will be presented to discuss numerical results.

Keywords

• distributed photovoltaics
• distributed storage
• distributed energy economics