Reduce the cost of electricity distribution LOWER TARIFF
Have a unique tariff for all households UNIFORM TARIFF
Have a tariff that’s both fair and encourage the transaction to a low carbon economy-possible change in the tariff structure. TARIFF STRUCTURE
BIT OF CONTEXT
Belgium is divided in three regions, namely Flanders, Wallonia and the Brussels Capital Region. When it comes to energy, the distribution charges and markets are different for every region. A market overview of the country Belgium is therefore not possible.
the electricity sector is vertically disintegrate
So we have information that there are 7 Distribution System Operators (DSOs) in the region of Wallonia.
One particularity of the distribution bill in Wallonia is that it is for the most based on the volume of electricity consumed
the distribution of electricity is operated by local regulated monopolies
Tariffs are set differently according to 13 different geographical zones, while other components of the retail price depend on market forces, policies and regulations impacting homogeneously the region
The majority of these were operated by ORES
The regulated distribution tariff covers the cost of the grid cost but not only. There are several public service obligations imposed to the DSO, mainly social tariffs and public lightening, that are covered by the distribution tariff. In the recent years, the costs of those obligations, especially those linked to the social tariff have been on the rise
distribution tariffs that vary according to the 13 geographical tariff zones in place, while the rest of the energy bill is on average similar across the region as they rely on market forces and regulations effective at the regional and supra-regional level.
The sharp rise in prices underway on the energy markets is clearly visible in the figures for June 2021.
In fact, in June 2021, the average annual bill paid by residential customers in the Walloon Region stood at 994.12 € in electricity for the customer-type Dc, an increase of 8.59% compared to December 2020.
This increase is mainly due to the increase in the energy component between December 2020 and June 2021 which increases by € 61.78 or by 19.80%.
The increased demand, linked to the economic recovery, is pushing up the prices of raw materials and energy, the sharp rise in gas has a direct impact on the price of electricity. The rise in individual consumers’ bills is already clearly visible in June 2021, and is likely to continue. This rise in the markets also affects the social tariff.
The CWaPE notes that the level of the weighted average annual bill remains high, which means that many consumers have expensive energy contracts.
Through this report, we can see the sharp rise in prices in the energy markets. The increase in commodity prices started as soon as the markets recovered at the end of 2020, after the sharp drop in the second quarter of 2020 linked to Covid 19, and has been accelerating since the second quarter of 2021. This uptrend does not appear to be close to come to a standstill, the markets are registering particularly high price forecasts for gas and electricity. The increased demand, linked to the economic recovery, is pushing up the prices of raw materials and energy, the strong rising gas directly impacts the price of electricity. The rise in individual consumers’ bills is
already clearly visible in June 2021, and is likely to continue. This market increase also affects the tariff
1 cliente consome em media 3500 kw/ano em conexão bi horaria
Distributed solar photovoltaic system that have the potential to supply electricity during grid outages and increase the resiliency of the electricity system.
A key issue for the distribution system operators (DSO) is to integrate distributed production units (DPU), like residential solar panels, that are connected to the low voltage grid. By installing solar panels, households do not only produce the green energy that they consume, they are also using the grid to make power exchanges. Indeed, a grid-connected DPU can import electricity when the production is insufficient to cover its consumption and export the excessive power when production exceeds consumption. Regulation of these exchanges is of prime importance to provide adequate incentives for investment and to ensure the financial viability of the distribution grid. The regulated grid tariff has to reconcile these two dimensions.
e tariff-related part of the bill is almost fully dependent on the amount of electricity consumed. Hence, in this peculiar context, investing in PV helps reduce to close to zero an annual energy bill that for an average household would range between 700e and 1100e depending on the municipality where the household lives. These savings accrue for the lifetime of the PV installation and of the net metering system.
using a two-way fixed effects model, we do find that higher energy prices due to the prevalence of higher consumption-based tariffs provide a significant incentive to invest in residential PVs
an increase in the distribution tariff would lead to increase of the new PV because regulated grid tariffs strongly influence the residential investment in solar PV
costs of solar PVs for the DSO (lost income, possible additional grid costs) were not included in the distribution tariff until the next period
. For these reasons, the rapid deployment of PV had no direct and immediate influence on the distribution tariff and reverse causality is not a concern in our particular institutional setting..
One particularity of the distribution bill in Wallonia is that it is for the most based on the volume of electricity consumed (Hinz et al. (2018))8. For an average consumption of 3500 kWh per year, an average resident of Wallonia will have a bill related to the distribution of electricity that depends only at around 5% from fixed/capacity charges.9 The rest depends on the volume of electricity consumed. This reliance on the volumetric part i
Distribution tarrif is rising
Through this article, discover how the various elements that make up a household’s electricity bill have evolved:
• unit energy prices
• distribution and transmission network costs
• fixed fees
• various contributions
To approach the price evolution of the electricity bill , it is essential to know its different components. Here is a quick recap:
- The energy (prices of the molecule);
- The contribution to renewable energies (or cost of green energy);
- The costs of transport and distribution networks ;
- The taxes and surcharges (including royalties and federal and regional contributions).
Only the first two components of the bill ( energy and contribution to renewable energies) are subject to competition . Indeed, electricity suppliers are free to determine the prices of energy and the contribution to renewable energies .
With regard to the other two components (the costs of transmission and distribution networks as well as taxes and surcharges ), the market is not liberalized . Consumers cannot therefore choose their distribution and / or transport network operator.
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