The Clean Energy Package and Demand Response: Setting Correct Incentives
(2020) Energies — Vol. 13, n° 21, p. 5672 (2020)
Files
energies-13-05672-v2.pdf
Open Access - Adobe PDF
- 1.87 MB
Details
- Authors
- Abstract
- We describe how recent EU regulation affects demand response (DR) and highlight some of the remaining regulatory challenges from a legal and economic viewpoint. With the Clean Energy Package (CEP), the EU has opted for a fully market-based, consumer-centered approach for DR. The development of business models and products is left to a large extent to market forces. However, to enable the efficient development of those DR markets, network regulation has to adapt. (1) Network tariffs have to become more cost-reflective to provide correct incentives to market participants. The capacity tariffs have to increase, net-metering should be abolished, and optional tariff components for providing flexibility may need to be considered. (2) The regulation for distribution system operators (DSOs) may need to be fine-tuned to reflect their new roles. We present three scenarios: (a) a horizontal merger of unbundled DSOs under incentive regulation, (b) a DSO as a subsidiary of an integrated utility under cost plus regulation, (c) a transfer of some activities from DSO to TSO.
- Affiliations
Citations
Willems, B., & Zhou, J. (2020). The Clean Energy Package and Demand Response: Setting Correct Incentives. Energies, 13(21), 5672. https://doi.org/10.3390/en13215672 (Original work published 2020)