An Economic analysis of Local Use of System charges for neighbourhood batteries

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Mountain, Bruce ORCID: 0000-0002-2093-2038 and Burns, Kelly ORCID: 0000-0003-4031-3442 (2021) An Economic analysis of Local Use of System charges for neighbourhood batteries. Working Paper. Victoria Energy Policy Centre, Victoria University, Melbourne, Australia.

Abstract

Should neighbourhood batteries pay discounted “Local Use of System” (LUoS) charges for their use of the electricity grid? This article presents economic arguments. It concludes that a rationale exists for such discounted charges, for the same reason that network charge discounts are justified to avoid network by-pass. Eligibility needs to be carefully defined to maximise the prospect that neighbourhood batteries are charged from distributed (local) solar. We also conclude that if LUoS is applied to neighbourhood batteries, fairness arguments suggest solar sponge tariffs should be offered to residential consumers.

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Additional Information

VEPC Working Paper 2109a

Item type Monograph (Working Paper)
URI https://vuir.vu.edu.au/id/eprint/42669
DOI https://doi.org/10.26196/vkxg-np11
Subjects Current > FOR (2020) Classification > 3801 Applied economics
Current > Division/Research > Institute for Sustainable Industries and Liveable Cities
Current > Division/Research > Victoria Energy Policy Centre (VEPC)
Keywords neighbourhood batteries, network by-pass, solar sponge tariffs, local use of system charges
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Data Citation/Attribution

Mountain, B., & Burns, K. (2021). An Economic analysis of Local Use of System charges for neighbourhood batteries. Victoria Energy Policy Centre, Victoria University. https://doi.org/10.26196/VKXG-NP11

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