Electricity Associations as Marked-based Steering Mechanism and Alternative to Fixed Feed-in Tariffs

Abstract

This paper describes a business model for local electricity supply and demand steering using flexible electricity prices. Therefore it evaluates first the composition of the electricity price. Secondly it estimates the future renewable electricity generation cost. Therefore future renewable electricity generation prime cost are calculated with a combination of historically derived learning rates and global market growth estimations, both derived from literature. Thirdly it evaluates the tax burden on local traded electricity. As result a business model and legal construct which reduces the tax and levy burden on electricity is identified as crucial factor for flexible electricity prices. With electricity associations this paper identifies such a judicial construct. Finally centralised demand steering with smart flexible agents like electric vehicles, dishwasher and washer-dryer is described. This steering allows to synchronize renewable electricity generation from photovoltaic power plants, wind turbines and combined heat and power and the local electricity demand.