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A review of equity in electricity tariffs in the renewable energy era

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  • Ansarin, Mohammad
  • Ghiassi-Farrokhfal, Yashar
  • Ketter, Wolfgang
  • Collins, John

Abstract

The rapid growth of distributed renewable energy sources has increased concerns about the fairness of electricity pricing, particularly in the residential sector. Hence, many recent studies have focused on topics of equity in residential electricity tariffs. This paper reviews such studies and places them in a historical context of the study of electricity tariffs and the study of pricing fairness. Studies of scenarios with attention to distributed renewables growth tend to focus primarily on one of three matters: (a) normative concerns, (b) quantifying tariff (or more generally, policy) fairness, and (c) quantifying the transitional fairness of pricing decisions over multi-year timespans. After the review, research gaps in each category are illustrated. This paper also provides stringent comparisons of common methodological choices regarding their influence on fairness calculations. These comparisons highlight choices that ensure rigor and comparability in future studies of tariff fairness. This review provides researchers and policy-makers with a wider perspective of the current state of understanding of the effects of D-RES increases on distributional concerns in residential electricity pricing.

Suggested Citation

  • Ansarin, Mohammad & Ghiassi-Farrokhfal, Yashar & Ketter, Wolfgang & Collins, John, 2022. "A review of equity in electricity tariffs in the renewable energy era," Renewable and Sustainable Energy Reviews, Elsevier, vol. 161(C).
    • Handle: RePEc:eee:rensus:v:161:y:2022:i:c:s1364032122002465
    DOI: 10.1016/j.rser.2022.112333
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    2. Lee, Hyun-Suk, 2024. "Automated tariff design for energy supply–demand matching based on Bayesian optimization: Technical framework and policy implications," Energy Policy, Elsevier, vol. 188(C).
    3. Gunkel, Philipp Andreas & Bergaentzlé, Claire-Marie & Keles, Dogan & Scheller, Fabian & Jacobsen, Henrik Klinge, 2023. "Grid tariff designs to address electrification and their allocative impacts," Utilities Policy, Elsevier, vol. 85(C).
    4. Han, Xintong & Liu, Zimin & Wang, Tong, 2023. "Nonlinear pricing in multidimensional context: An empirical analysis of energy consumption," International Journal of Industrial Organization, Elsevier, vol. 91(C).
    5. Covington, Hannah & Woo-Shem, Brian & Wang, Chenli & Roth, Thomas & Nguyen, Cuong & Liu, Yuhong & Fang, Yi & Lee, Hohyun, 2024. "Method for evaluating fairness of electricity tariffs with regard to income level of residential buildings," Applied Energy, Elsevier, vol. 353(PB).
    6. Gjorgievski, Vladimir Z. & Velkovski, Bodan & Francesco Demetrio, Minuto & Cundeva, Snezana & Markovska, Natasa, 2023. "Energy sharing in European renewable energy communities: Impact of regulated charges," Energy, Elsevier, vol. 281(C).
    7. Lyu, Yuan & He, Yongxiu & Li, Shanzi & Zhou, Jinghan & Li, Bo, 2024. "Impact of grid connection cost channeling mechanisms on the development of distributed photovoltaic: The case of China," Energy Policy, Elsevier, vol. 187(C).
    8. Lyu, Yuan & He, Yongxiu & Zhou, Jinghan & Xie, Yuxin, 2023. "Prosumer standby fee design: Solving the inequity problem of China's county-wide photovoltaic project promotion," Renewable Energy, Elsevier, vol. 207(C), pages 309-320.
    9. Andreea-Ileana Zamfir & Elena Oana Croitoru & Cristina Burlacioiu & Cosmin Dobrin, 2022. "Renewable Energies: Economic and Energy Impact in the Context of Increasing the Share of Electric Cars in EU," Energies, MDPI, vol. 15(23), pages 1-19, November.
    10. Liu, Yun & Gao, Yunqiang & Borghetti, Alberto & Li, Yuanzheng & Gooi, Hoay Beng & Sun, Chao & Wu, Ting & Zhu, Jizhong, 2024. "A decentralized approach for time-of-use network utilization pricing in peer-to-peer energy markets," Applied Energy, Elsevier, vol. 361(C).
    11. Dina A. Zaki & Mohamed Hamdy, 2022. "A Review of Electricity Tariffs and Enabling Solutions for Optimal Energy Management," Energies, MDPI, vol. 15(22), pages 1-17, November.

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