Econonomics of Energy and Environmental Policy

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Electricity Network Charging in the Presence of Distributed Energy Resources: Principles, Problems and Solutions

Open Access Article

This paper discusses the principles of electricity network charging in the light of increasing amounts of distributed generation and the potential for significant increases in electric vehicles or distributed electrical energy storage. We outline cost reflective pricing, traditional public service pricing, platform market pricing and customer- focused business model pricing. We focus on the particular problem of how to recover network fixed costs and a recent example from Australia. We conclude that there are serious issues for regulators to address, but that potential solutions at the distribution level may already exist at the transmission level.
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JEL Codes:L51: Economics of Regulation, Q42: Alternative Energy Sources, L94: Electric Utilities

Keywords: network charging methodology, distribution charges, distributed energy resources, regulation

DOI: 10.5547/2160-5890.7.1.mpol

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Published in Volume 7, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


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