Efficient Network Tariffs for Flexible Consumers
At a glance
Sector coupling and increasing production from renewable energy sources are leading to a growing need for grid expansion. Network tariffs enabled by digitalisation could avoid some of these expansions by incentivizing consumers to make their flexibility available at a lower cost. In this project, we will derive such efficient, cost-minimising tariffs. We will first analyse what modifications of load-flows are required to avoid grid expansion. We will then build a bottom up model of the demand curve allowing us to estimate the cost of these load-flow modifications depending on the magnitude, frequency and duration of demand or supply restrictions for different types of consumers. Based on this we will derive a tariff design, which incentivizes a combination of demand response and grid investments that minimize the total cost of society. We will quantify the resulting cost savings and highlight policy implications for Switzerland and the EU.