Distributed renewable energy sources (D-RES) are growing, transforming electricity consumers into producer-consumers ("prosumers"). Retail electricity tariffs require new mechanisms to fairly purchase D-RES generation from and transfer costs to prosumers. Otherwise, cross-subsidy (wealth transfers from some prosumers to others) can worsen tariff outcomes. Tariffs depend on metering infrastructure, where two choices can significantly impact cross-subsidies: a) metering generation and consumption separately, and b) using advanced metering infrastructure (AMI) that allows for more granular accounting of energy trade. We use high-resolution energy data from 2016 from Austin, TX, USA, to study these impacts in a high-D-RES distribution grid. We consider multiple tariffs and metering scenarios, thus separating their effects. We find that traditional tariffs using legacy metering create median annual cross-subsidy values from 38% to 100% of real costs. However, AMI can reduce these values by 2 to 3 orders of magnitude when a tariff that utilizes AMI’s options is used. In contrast, metering generation separately from consumption appears to have little impact on cross-subsidies. Our results have implications for metering infrastructure choices and tariff design for grids undergoing rapid growth of D-RES generation.

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doi.org/10.1016/j.enpol.2020.111736, hdl.handle.net/1765/128041
Energy Policy
Department of Technology and Operations Management

Ansarin, M., Ghiassi-Farrokhfal, Y., Ketter, W., & Collins, J. (2020). Cross-subsidies among Residential Electricity Prosumers from Tariff Design and Metering Infrastructure. Energy Policy, 145(2020 (111736)), 1–13. doi:10.1016/j.enpol.2020.111736