Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/240959
Authors: 
Jeddi, Samir
Sitzmann, Amelie
Year of Publication: 
2021
Series/Report no.: 
EWI Working Paper No. 21/01
Abstract: 
Adequately designed prices are essential to achieve efficient coordination between the electricity network and market participants. However, consumer prices comprise several, possibly distorting price components. In an analytical model, we examine different regulatory settings, consisting of alternative spot market pricing schemes and network tariff designs in a dynamic context. While a setting with zonal pricing and fixed network tariffs achieves the highest welfare, a deviation of either the pricing scheme or the network tariff design leads to inefficiencies. However, we show that two inefficiently designed price components can be better than one, especially if network tariffs correct for the static inefficiency of the pricing scheme. Besides the network tariff design, network operators must pay attention to the allocation of network costs. It affects spatial price signals and, therefore, the dynamic allocation of investment decisions. Considering these decisions in a dynamic framework increases the requirements for the configuration of network tariffs, especially with volume-based network tariffs.
Subjects: 
Network tariffs
network regulation
market design
pricing schemes
dynamic consistency
spatial investment incentives
JEL: 
D47
D61
L51
L94
Q41
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.