Nele Friedrichsen

Locational distribution network pricing in Germany

Increasing shares of renewable generation in distribution networks drive the debate on locationally differentiated network charging. We investigate the potential of individual contracts to implement locational signals within the existing framework as an alternative to a complete change of the current tariff methodology. The analysis starts from the framework of Germanys electricity supply as of today and presents different perspective on the option of smart contracts to implement locational signals in distribution networks.

Smart Pricing to Reduce Network Investment in Smart Distribution Grids—Experience in Germany

Publisher Summary This chapter focuses on the locational, rather than the time-differentiated dimension of the problem and on the potential this has to increase investment efficiency. The implementation of locational pricing results in socially beneficial investment based on locational coordination of investments. This chapter examines smart pricing as a means to defer distribution network investment. Experience with locational distribution pricing is still scarce, but shows a trend to more flexible pricing structures. In distribution networks, locational differentiation appears in network tariffs if at all. In the future smarter tariffs can be expected to gain further importance. The energy system becomes more flexible with high shares of renewable generation and flexible demand in smart distribution systems. A flexible tariff structure is necessary to exploit the benefits of smart grids. Locational pricing can be in the form of locational network pricing or locational energy pricing. The former includes deep connection charges and locationally differentiated use-of-system charges.

Price incentives for smart electric vehicle operation - Status quo and perspectives

Integrating electric vehicles (EVs) into future smart power systems is challenge and opportunity in one. Achieving system optimization, renewables integration and quick diffusion requires coordination of EVs with the power system. This paper analyzes price differentiation as a means to incentivize smart EV operation. For smart EV operation time, location and volume are important dimensions of price incentives. A diverse portfolio of tariffs caters to different business models and actors. Ideally this induces a win-win situation with benefits for both users and system operation. However, the quality and effectiveness of price incentives and thus the success of coordination depends on conditions such as price level, consumer behavior and regulation.

Vertical Unbundling and the Coordination of Investment in Electric Systems: On ‘Cheap Talk’ and Deep Charging

This paper addresses the investment coordination problem in a vertically separated electricity supply industry in the absence of locational pricing. In an electricity system, investments in network and power plants need to be coordinated. Unbundling eliminates firm-internal coordination. Information exchange might restore coordination if communication is truthful. Based on model results we analyse whether cheap talk of generator investors would be credible and hence informative for network investment decisions. We show that due to perverse incentives, this is not generally the case. We propose cost-reflective, locational network pricing as a coordination device to internalize the incentive problem.