A reduction of distribution grid fees by combined PV and battery systems under different regulatory schemes

• Published in: 2016 13th International Conference on the European Energy Market (EEM) pp. 1 - 5
• Main Authors: Schmidt, Johannes, Wehrle, Sebastian, Rusbeh, Rezania
• Format: Conference Proceeding Journal Article
• Language: English
• Published: IEEE 01.06.2016
• Subjects: Batteries; Costs; Distributed generation; Distributed power generation; Households; Incentives; Investment; Load modeling; Optimization; Peak load; Photovoltaic cells; Photovoltaics; Power Grids; Production; Profitability; Revenues; Solar cells; Supply and Demand
• DOI: 10.1109/EEM.2016.7521339

Depending on the chosen regulation, distributed generation reduces revenues for Distribution System Operators (DSOs) although costs for maintaining the system do not decrease - or even increase due to new load patterns such as peak generation of PV. We assess the impact of different forms of grid fees on household choices of PV and battery systems in a cost minimization framework and explore how those align with the requirements of DSOs. Fixed grid fees, independent of consumption and of peak demand of households, best allow for a full recovery of costs by DSOs. However, they pose a barrier to increasing distributed generation. Variable grid tariffs are not compatible with requirements of DSOs as they increase incentives for distributed generation but do not incentivize load shifting, thus increasing average and peak load at decreasing DSO revenues. Demand fees which are paid based on the peak load of households create incentives for decentralized storage. However, they may reduce revenues of DSOs significantly, while they do not necessarily decrease system costs to the same extent: peak load on the grid still remains high although the peak load of single households is reduced, due to changes in the correlation of loads of households after adopting battery technologies.