Efficient Distribution Network Pricing in the Context of the Electricity Industry Transformation in Australia

Abstract:
The electricity industry is in the midst of its most important transformation since the early twentieth century. This transformation is leading to substantial investment in distributed energy resources – controllable devices for producing, storing and consuming electric power which are connected to the distribution grid (e.g., solar PV, domestic storage, electric vehicles and smart appliances). The electricity transformation is placing historic distribution pricing arrangements under significant pressure. If we are to achieve efficient use of and investment in distributed energy resources, and if networks are to receive sufficient revenue to cover their costs, network pricing arrangements will have to change. But what does efficient distribution network pricing look like? How can efficient prices be computed? What institutional arrangements do we need to implement efficient distribution network pricing? This presentation will discuss the theory of efficient distribution network pricing and the policy issues associated with implementing efficient pricing arrangements in Australia.