Efficient Distribution Network Pric ing in the Context of the Electricity Industry Transformation in Australia< /strong>
Abstract:
The ele
ctricity industry is in the midst of its most important transformation sinc
e the early twentieth century. This transformation is leading to substantia
l investment in distributed energy resources – controllable devices for pro
ducing, storing and consuming electric power which are connected to the dis
tribution grid (e.g., solar PV, domestic storage, electric vehicles and sma
rt appliances). The electricity transformation is placing historic distribu
tion pricing arrangements under significant pressure. If we are to achieve
efficient use of and investment in distributed energy resources, and if net
works are to receive sufficient revenue to cover their costs, network prici
ng arrangements will have to change. But what does efficient distribution n
etwork pricing look like? How can efficient prices be computed? What instit
utional arrangements do we need to implement efficient distribution network
pricing? This presentation will discuss the theory of efficient distributi
on network pricing and the policy issues associated with implementing effic
ient pricing arrangements in Australia.