Regional differentiation of electricity prices: social-equitable approach

Abstract

Based on the principle of social equitability and the concept of green energy, a new approach to electricity pricing on local level has been developed. The balance of electricity production and its consumption by the population of a certain territory, the volumes of direct and indirect hazardous substances emissions from the energy sector and the structure of the energy capacities of the region are the main factors determining the electricity pricing at the regional level. The calculations were carried out on the statistical data of 22 regions of Ukraine up to 2016. It is proposed to implement regional differentiation of retail tariffs for electricity. It is advisable to apply a reduction in fixed tariffs for electricity in 13 regions of Ukraine where the largest energy capacities concentrated. The increase in the electricity tariff is expected to be carried out in nine regions that do not meet the needs of the population with the help of energy of own production. The use of correction factors provides for the formation of long-term incentives for switching to the production of green energy both in regions that have a deficit and an excess of energy capacity.