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.
Highlights
Distribution systems are normally regulated monopolies where the authority set electricity rates.In such a scenario, an electricity tariff system is a rate structure that aims to guarantee regulatory and economic aspects.From a regulatory perspective, the methodology, employed criteria and procedures of the tariff system must be made public to ensure transparency [1]
The results suggest that consumer reactions to dynamic tariffs are strongly related to the cognitive effort they make in order to understand the tariff system to estimating the bill amount
This work has presented a tariff system of simple implementation that guarantees recovery of the total regulated cost and send price signal tending to efficiency by incentivizing peak shaving
Summary
Distribution systems are normally regulated monopolies where the authority set electricity rates. Simple and widely used, volumetric tariffs are very limited in terms of guaranteeing recovery of the total regulated costs under the penetration of Distributed Generation (DG). To some extent, recovery of regulated costs under the integration of DG are mathematically complex in the context of tariff systems. In [20], a tariff structure for each day is calculated by formulating and solving a binary linear optimization problem, as well as [21] that proposes an optimization framework to represent the tariff system in order to maximize social welfare As it can be seen, the problem of tariff systems under the penetration of DG is clear, but the various approaches in the literature overlook the need for simplicity coming from the regulatory need of transparency and customer responsiveness. A numerical example is presented in order to show the behavior of the proposed approach
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