Distribution network tariff design under the Clean Energy Package

The report evaluates fixed, volumetric, and capacity-based distribution network tariffs against the EU's Electricity Regulation. It argues that high fixed charges and non-dynamic contracted capacity charges may hinder the transition to a decentralised energy system by discouraging flexibility and demand response. The author suggests that volumetric time-of-use charges and critical peak capacity charges are most likely to meet the CEP's requirements for cost-reflectivity and the fostering of innovation and flexibility.

• Tariff designs with a high fixed charge are likely to fail the Electricity Regulation's requirements because they do not account for specific costs imposed by individual consumers and discourage innovation in flexibility, such as demand response.
• High contracted capacity charges, which are pre-set and non-dynamic, may not align with the CEP as they remove consumer choice and fail to incentivise the use of demand response or small-scale storage to reduce peak load.
• Volumetric tariffs with time-of-use elements are identified as a strong option for meeting CEP requirements because they encourage flexible behaviour and the use of household batteries to reduce demand during grid congestion.
• Capacity-based tariffs are generally more cost-reflective than fixed or volumetric charges because network investment is driven by peak demand; however, ex post charges may lack the foreseeability required by the Electricity Regulation.
• There is a noted tension between achieving cost-reflectivity and ensuring social equity, as high volumetric tariffs may shift costs onto less adaptable or vulnerable consumers who cannot afford self-generation technologies.

APA

Hanson, C. (2019). Distribution network tariff design under the Clean Energy Package. ClientEarth. https://www.clientearth.org/media/w4xlyojt/distribution-network-tariff-design-under-the-clean-energy-package-legal-requirements-and-policy-impacts-ce-en.pdf

Chicago

Hanson, Charlotte. Distribution network tariff design under the Clean Energy Package. ClientEarth, 2019. https://www.clientearth.org/media/w4xlyojt/distribution-network-tariff-design-under-the-clean-energy-package-legal-requirements-and-policy-impacts-ce-en.pdf.

Wikipedia

{{cite report |last1=Hanson |first1=Charlotte |title=Distribution network tariff design under the Clean Energy Package |publisher=ClientEarth |date=December 2019 |url=https://www.clientearth.org/media/w4xlyojt/distribution-network-tariff-design-under-the-clean-energy-package-legal-requirements-and-policy-impacts-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{hanson2019distribution, author = {Hanson, Charlotte}, title = {{Distribution network tariff design under the Clean Energy Package}}, institution = {ClientEarth}, year = {2019}, month = dec, url = {https://www.clientearth.org/media/w4xlyojt/distribution-network-tariff-design-under-the-clean-energy-package-legal-requirements-and-policy-impacts-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }