Interaction between DER adoption decisions, tariff design and power system cost recovery

Abstract

Increasing concerns over global warming, unstable prices of fossil fuels, pollution are only few of the reasons for the growth of the renewable generation. Renewable generation is supported at different levels, but lately distributed generation at the customer level started increasing. Unfortunately, distributed generation has its own disadvantages, and the main drawback is a deficit in the cost recovery and as the result, the cross-subsidization among consumers. In this thesis, the methodology to evaluate the effect of the tariff design on the cost recovery of the system when solar PV is installed is proposed. This methodology was used for the Spanish residential and commercial customers. Three models, Financial Model (Model I), DER-CAM (Model II) and Cost Recovery Model (Model III) were utilized. Firstly, monthly payable amounts for regulated activities for all tariff designs are calculated in model I. Secondly, the tariffs from the model I are utilized in the DER-CAM to find the annual deficit created by a PV owner. Then, these results are further used in the cost recovery model to analyze the system cost recovery deficit. This study compares the deficits created by various tariff designs under different scenarios of self-generation.