The Economic Consequences of Electricity Pricing in the Renewable Energy Era



This is an online defence

Policymakers create incentive schemes to encourage uptake of distributed renewable energy resources (D-RES) by smaller electricity users to replace some pollutant generation. These incentives sometimes conflict with the existing economic relationships between retailers and consumers. The tariffs defining these relationships are designed on certain principles, of which equity and economic efficiency are directly impacted by high D-RES growth. This thesis details the influence of growing D-RES on the equity and economic efficiency of electricity tariffs. First, a map of the research into equity is provided in Chapter 2. In Chapter 3, the thesis investigates and separates the role of metering infrastructure and tariffs in creating inequities within household populations. Chapter 4 investigates how growing D-RES installations impacts the efficiency and equity of multiple tariffs. Chapter 5 complements this study by describing the economic inefficiencies of D-RES remuneration, which cause over- or under-installations of D-RES. Newer time-based pricing schemes are necessary to prevent high (and probably undesirable) inefficiency and inequity within and between household populations. Installing smart meters is a prerequisite for these tariffs. Using extra meters at the generation resource simplify paying for D-RES generation, but the improvements for inequity are comparatively small. This thesis provides insights for businesses and policymakers in the energy industry, particularly those involved with D-RES.