Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options
Abstract Background Demand response is an important option for accommodating growing shares of renewable electricity, and therefore, crucial for the success of the energy transition in Germany and elsewhere. In conjunction with smart meters, real-time (or ‘dynamic’) electricity tariffs can facilitat...
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BMC
2024-11-01
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| Series: | Energy, Sustainability and Society |
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| Online Access: | https://doi.org/10.1186/s13705-024-00490-z |
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| author | Sönke Häseler Alexander J. Wulf |
| author_facet | Sönke Häseler Alexander J. Wulf |
| author_sort | Sönke Häseler |
| collection | DOAJ |
| description | Abstract Background Demand response is an important option for accommodating growing shares of renewable electricity, and therefore, crucial for the success of the energy transition in Germany and elsewhere. In conjunction with smart meters, real-time (or ‘dynamic’) electricity tariffs can facilitate the flexibilization of power consumption and reduce energy bills. Whilst such tariffs are already quite common in several EU member states, Germany lags behind in this respect. The country makes for an interesting case study because of the sheer volume of additional flexibility that its energy transition necessitates. Main text This paper discusses how German policymakers can make real-time tariffs more attractive for households and thus entice them to better adapt their consumption to current market conditions. Following an analysis of the current impediments to the adoption of such tariffs, we discuss four policy options: (1) a more ambitious legal definition of real-time tariffs that can promote market transparency and leverage potential savings for consumers, (2) a shift in energy taxation that encourages the uptake of renewable power and increases price spreads, (3) a new model of dynamic network charges which combines grid-serving and market-serving incentives, and (4) a subsidy for users of real-time tariffs that helps internalise the benefits they provide to all electricity consumers. Given the similar regulatory framework, our suggestions should generally also apply to other countries in Europe and beyond. Conclusions Overall, we argue that there is considerable scope for policymakers to better exploit market forces to ensure security of electricity supply at lower social cost. Our call for stricter regulation in order to allow the markets to better guide consumer behaviour may seem like a paradox—but it is one well worth embracing. |
| format | Article |
| id | doaj-art-db796cba71d44db7b65ee4411b537d31 |
| institution | Kabale University |
| issn | 2192-0567 |
| language | English |
| publishDate | 2024-11-01 |
| publisher | BMC |
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| series | Energy, Sustainability and Society |
| spelling | doaj-art-db796cba71d44db7b65ee4411b537d312024-11-17T12:40:00ZengBMCEnergy, Sustainability and Society2192-05672024-11-0114111210.1186/s13705-024-00490-zPromoting real-time electricity tariffs for more demand response from German households: a review of four policy optionsSönke Häseler0Alexander J. Wulf1SRH Berlin University of Applied SciencesSRH Berlin University of Applied SciencesAbstract Background Demand response is an important option for accommodating growing shares of renewable electricity, and therefore, crucial for the success of the energy transition in Germany and elsewhere. In conjunction with smart meters, real-time (or ‘dynamic’) electricity tariffs can facilitate the flexibilization of power consumption and reduce energy bills. Whilst such tariffs are already quite common in several EU member states, Germany lags behind in this respect. The country makes for an interesting case study because of the sheer volume of additional flexibility that its energy transition necessitates. Main text This paper discusses how German policymakers can make real-time tariffs more attractive for households and thus entice them to better adapt their consumption to current market conditions. Following an analysis of the current impediments to the adoption of such tariffs, we discuss four policy options: (1) a more ambitious legal definition of real-time tariffs that can promote market transparency and leverage potential savings for consumers, (2) a shift in energy taxation that encourages the uptake of renewable power and increases price spreads, (3) a new model of dynamic network charges which combines grid-serving and market-serving incentives, and (4) a subsidy for users of real-time tariffs that helps internalise the benefits they provide to all electricity consumers. Given the similar regulatory framework, our suggestions should generally also apply to other countries in Europe and beyond. Conclusions Overall, we argue that there is considerable scope for policymakers to better exploit market forces to ensure security of electricity supply at lower social cost. Our call for stricter regulation in order to allow the markets to better guide consumer behaviour may seem like a paradox—but it is one well worth embracing.https://doi.org/10.1186/s13705-024-00490-zReal-time electricity pricingDemand responseEnergy transitionFlexibilityNetwork chargesElectricity tax |
| spellingShingle | Sönke Häseler Alexander J. Wulf Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options Energy, Sustainability and Society Real-time electricity pricing Demand response Energy transition Flexibility Network charges Electricity tax |
| title | Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options |
| title_full | Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options |
| title_fullStr | Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options |
| title_full_unstemmed | Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options |
| title_short | Promoting real-time electricity tariffs for more demand response from German households: a review of four policy options |
| title_sort | promoting real time electricity tariffs for more demand response from german households a review of four policy options |
| topic | Real-time electricity pricing Demand response Energy transition Flexibility Network charges Electricity tax |
| url | https://doi.org/10.1186/s13705-024-00490-z |
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