[go: up one dir, main page]
More Web Proxy on the site http://driver.im/
IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v76y2017icp932-940.html
   My bibliography  Save this article

Residential energy efficiency and distributed generation - Natural partners or competition?

Author

Listed:
  • Oliva H., Sebastian
Abstract
Residential energy efficiency and distributed generation seem to be natural partners in our journey towards a more sustainable energy future. A growing range of energy efficient consumer technologies and extraordinary declines in photovoltaics system prices has seen household electricity demand fall whilst a growing proportion of the remaining load is provided by household self-generation. Australia is a particularly interesting example of these developments, with around 15% of households now possessing a PV system while per-capita household demand has also fallen markedly. However, existing retail electricity tariffs and regulatory arrangements can create mixed incentives for households contemplating both PV and energy efficiency options and for their network service providers. This is certainly the case in Australia with net metering arrangements that value self-consumption of PV far more than PV exports to the grid. There are also complex benefits for the electricity network created by these household energy resources that can be significant. In this paper we use real household load and PV data from Sydney households to model the potential implications of existing electricity tariff arrangements on the financial attractiveness of PV and energy efficiency. We model these options separately and in combination for both households implementing these options and their network service providers. Our results highlight how inappropriate tariffs may well adversely impact on the value that the combination of energy efficiency and PV offers not only to households, but also to their network service providers, and suggest ways that such impacts might be ameliorated by acknowledging the benefits that these resources can offer to the electricity network.

Suggested Citation

  • Oliva H., Sebastian, 2017. "Residential energy efficiency and distributed generation - Natural partners or competition?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 76(C), pages 932-940.
    • Handle: RePEc:eee:rensus:v:76:y:2017:i:c:p:932-940
    DOI: 10.1016/j.rser.2017.03.083
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032117304173
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2017.03.083?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kenneth Gillingham & Karen Palmer, 2014. "Bridging the Energy Efficiency Gap: Policy Insights from Economic Theory and Empirical Evidence," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 8(1), pages 18-38, January.
    2. Choi, Jun-Ki & Morrison, Drew & Hallinan, Kevin P. & Brecha, Robert J., 2014. "Economic and environmental impacts of community-based residential building energy efficiency investment," Energy, Elsevier, vol. 78(C), pages 877-886.
    3. Brown, Marilyn A., 2001. "Market failures and barriers as a basis for clean energy policies," Energy Policy, Elsevier, vol. 29(14), pages 1197-1207, November.
    4. Zhou, Bin & Li, Wentao & Chan, Ka Wing & Cao, Yijia & Kuang, Yonghong & Liu, Xi & Wang, Xiong, 2016. "Smart home energy management systems: Concept, configurations, and scheduling strategies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 61(C), pages 30-40.
    5. Satchwell, Andrew & Mills, Andrew & Barbose, Galen, 2015. "Quantifying the financial impacts of net-metered PV on utilities and ratepayers," Energy Policy, Elsevier, vol. 80(C), pages 133-144.
    6. Solangi, K.H. & Islam, M.R. & Saidur, R. & Rahim, N.A. & Fayaz, H., 2011. "A review on global solar energy policy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(4), pages 2149-2163, May.
    7. Hammond, Geoffrey P. & Harajli, Hassan A. & Jones, Craig I. & Winnett, Adrian B., 2012. "Whole systems appraisal of a UK Building Integrated Photovoltaic (BIPV) system: Energy, environmental, and economic evaluations," Energy Policy, Elsevier, vol. 40(C), pages 219-230.
    8. Burns, John Edward & Kang, Jin-Su, 2012. "Comparative economic analysis of supporting policies for residential solar PV in the United States: Solar Renewable Energy Credit (SREC) potential," Energy Policy, Elsevier, vol. 44(C), pages 217-225.
    9. N/A, 2012. "The UK economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 222(1), pages 2-3, October.
    10. -, 2016. "Monitoring energy efficiency in Latin America," Documentos de Proyectos 40809, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    11. ., 2016. "Electric energy utilities," Chapters, in: Public Utilities, Second Edition, chapter 4, pages 69-88, Edward Elgar Publishing.
    12. Satchwell, Andrew & Cappers, Peter & Goldman, Charles, 2011. "Carrots and sticks: A comprehensive business model for the successful achievement of energy efficiency resource standards," Utilities Policy, Elsevier, vol. 19(4), pages 218-225.
    13. Sharma, K. & Kim, Y.-H. & Yiacoumi, S. & Gabitto, J. & Bilheux, H.Z. & Santodonato, L.J. & Mayes, R.T. & Dai, S. & Tsouris, C., 2016. "Analysis and simulation of a blue energy cycle," Renewable Energy, Elsevier, vol. 91(C), pages 249-260.
    14. Chapman, Andrew J. & McLellan, Benjamin & Tezuka, Tetsuo, 2016. "Residential solar PV policy: An analysis of impacts, successes and failures in the Australian case," Renewable Energy, Elsevier, vol. 86(C), pages 1265-1279.
    15. Satchwell, Andrew & Mills, Andrew & Barbose, Galen, 2015. "Regulatory and ratemaking approaches to mitigate financial impacts of net-metered PV on utilities and ratepayers," Energy Policy, Elsevier, vol. 85(C), pages 115-125.
    16. Bazilian, Morgan & Onyeji, Ijeoma & Liebreich, Michael & MacGill, Ian & Chase, Jennifer & Shah, Jigar & Gielen, Dolf & Arent, Doug & Landfear, Doug & Zhengrong, Shi, 2013. "Re-considering the economics of photovoltaic power," Renewable Energy, Elsevier, vol. 53(C), pages 329-338.
    17. Mayr, Dieter & Schmid, Erwin & Trollip, Hilton & Zeyringer, Marianne & Schmidt, Johannes, 2015. "The impact of residential photovoltaic power on electricity sales revenues in Cape Town, South Africa," Utilities Policy, Elsevier, vol. 36(C), pages 10-23.
    18. Severin Borenstein, 2012. "The Private and Public Economics of Renewable Electricity Generation," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 67-92, Winter.
    19. Akorede, Mudathir Funsho & Hizam, Hashim & Pouresmaeil, Edris, 2010. "Distributed energy resources and benefits to the environment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(2), pages 724-734, February.
    20. Muhammad-Sukki, Firdaus & Ramirez-Iniguez, Roberto & Abu-Bakar, Siti Hawa & McMeekin, Scott G. & Stewart, Brian G., 2011. "An evaluation of the installation of solar photovoltaic in residential houses in Malaysia: Past, present, and future," Energy Policy, Elsevier, vol. 39(12), pages 7975-7987.
    21. Pepermans, G. & Driesen, J. & Haeseldonckx, D. & Belmans, R. & D'haeseleer, W., 2005. "Distributed generation: definition, benefits and issues," Energy Policy, Elsevier, vol. 33(6), pages 787-798, April.
    22. Ng, Thiam Hee & Tao, Jacqueline Yujia, 2016. "Bond financing for renewable energy in Asia," Energy Policy, Elsevier, vol. 95(C), pages 509-517.
    23. MacGill, Iain, 2010. "Electricity market design for facilitating the integration of wind energy: Experience and prospects with the Australian National Electricity Market," Energy Policy, Elsevier, vol. 38(7), pages 3180-3191, July.
    24. Asif, M. & Muneer, T., 2007. "Energy supply, its demand and security issues for developed and emerging economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 11(7), pages 1388-1413, September.
    25. Richard Tol, 2002. "Estimates of the Damage Costs of Climate Change. Part 1: Benchmark Estimates," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 21(1), pages 47-73, January.
    26. Eid, Cherrelle & Reneses Guillén, Javier & Frías Marín, Pablo & Hakvoort, Rudi, 2014. "The economic effect of electricity net-metering with solar PV: Consequences for network cost recovery, cross subsidies and policy objectives," Energy Policy, Elsevier, vol. 75(C), pages 244-254.
    27. Geller, Howard & Harrington, Philip & Rosenfeld, Arthur H. & Tanishima, Satoshi & Unander, Fridtjof, 2006. "Polices for increasing energy efficiency: Thirty years of experience in OECD countries," Energy Policy, Elsevier, vol. 34(5), pages 556-573, March.
    28. McHenry, Mark P., 2012. "Are small-scale grid-connected photovoltaic systems a cost-effective policy for lowering electricity bills and reducing carbon emissions? A technical, economic, and carbon emission analysis," Energy Policy, Elsevier, vol. 45(C), pages 64-72.
    29. N/A, 2012. "The UK Economy," National Institute Economic Review, National Institute of Economic and Social Research, vol. 220(1), pages 3-3, April.
    30. Beliën, Jeroen & De Boeck, Liesje & Colpaert, Jan & Cooman, Gert, 2013. "The best time to invest in photovoltaic panels in Flanders," Renewable Energy, Elsevier, vol. 50(C), pages 348-358.
    31. de la Rue du Can, Stephane & Leventis, Greg & Phadke, Amol & Gopal, Anand, 2014. "Design of incentive programs for accelerating penetration of energy-efficient appliances," Energy Policy, Elsevier, vol. 72(C), pages 56-66.
    32. Laia, R. & Pousinho, H.M.I. & Melíco, R. & Mendes, V.M.F., 2016. "Bidding strategy of wind-thermal energy producers," Renewable Energy, Elsevier, vol. 99(C), pages 673-681.
    33. Darghouth, Naïm R. & Wiser, Ryan H. & Barbose, Galen & Mills, Andrew D., 2016. "Net metering and market feedback loops: Exploring the impact of retail rate design on distributed PV deployment," Applied Energy, Elsevier, vol. 162(C), pages 713-722.
    34. Candelise, Chiara & Winskel, Mark & Gross, Robert J.K., 2013. "The dynamics of solar PV costs and prices as a challenge for technology forecasting," Renewable and Sustainable Energy Reviews, Elsevier, vol. 26(C), pages 96-107.
    35. Paul Diederen & Frank van Tongeren & Hennie van der Veen, 2003. "Returns on Investments in Energy-saving Technologies Under Energy Price Uncertainty in Dutch Greenhouse Horticulture," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 24(4), pages 379-394, April.
    36. Paul L. Joskow, 2011. "Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies," American Economic Review, American Economic Association, vol. 101(3), pages 238-241, May.
    37. Jako Jellema & Henk A. J. Mulder, 2016. "Public Engagement in Energy Research," Energies, MDPI, vol. 9(3), pages 1-19, February.
    38. Oliva H., Sebastian & MacGill, Iain & Passey, Rob, 2016. "Assessing the short-term revenue impacts of residential PV systems on electricity customers, retailers and network service providers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1494-1505.
    39. Mills, Andrew & Wiser, Ryan & Barbose, Galen & Golove, William, 2008. "The impact of retail rate structures on the economics of commercial photovoltaic systems in California," Energy Policy, Elsevier, vol. 36(9), pages 3266-3277, September.
    40. Alanne, Kari & Saari, Arto, 2006. "Distributed energy generation and sustainable development," Renewable and Sustainable Energy Reviews, Elsevier, vol. 10(6), pages 539-558, December.
    41. Unknown, 2016. "Energy for Sustainable Development," Conference Proceedings 253270, Guru Arjan Dev Institute of Development Studies (IDSAsr).
    42. Tim Nelson & Paul Simshauser & James Nelson, 2012. "Queensland solar feed-in tariffs and the merit-order effect: economic benefit, or regressive taxation and wealth transfers?," Economic Analysis and Policy, Elsevier, vol. 42(3), pages 277-301, December.
    43. Martin, Nigel & Rice, John, 2013. "The solar photovoltaic feed-in tariff scheme in New South Wales, Australia," Energy Policy, Elsevier, vol. 61(C), pages 697-706.
    44. Tonn, Bruce & Peretz, Jean H., 2007. "State-level benefits of energy efficiency," Energy Policy, Elsevier, vol. 35(7), pages 3665-3674, July.
    45. Liu, Xiaohui & O'Rear, Eric G. & Tyner, Wallace E. & Pekny, Joseph F., 2014. "Purchasing vs. leasing: A benefit-cost analysis of residential solar PV panel use in California," Renewable Energy, Elsevier, vol. 66(C), pages 770-774.
    46. Rüther, Ricardo & Zilles, Roberto, 2011. "Making the case for grid-connected photovoltaics in Brazil," Energy Policy, Elsevier, vol. 39(3), pages 1027-1030, March.
    47. Tim Nelson & Paul Simshauser & Simon Kelley, 2011. "Australian Residential Solar Feed-in Tariffs: Industry Stimulus or Regressive Form of Taxation?," Economic Analysis and Policy, Elsevier, vol. 41(2), pages 113-129, September.
    48. Darghouth, Naïm R. & Barbose, Galen & Wiser, Ryan, 2011. "The impact of rate design and net metering on the bill savings from distributed PV for residential customers in California," Energy Policy, Elsevier, vol. 39(9), pages 5243-5253, September.
    49. Talavera, D.L. & Nofuentes, G. & Aguilera, J., 2010. "The internal rate of return of photovoltaic grid-connected systems: A comprehensive sensitivity analysis," Renewable Energy, Elsevier, vol. 35(1), pages 101-111.
    50. Radhi, Hassan, 2011. "On the value of decentralised PV systems for the GCC residential sector," Energy Policy, Elsevier, vol. 39(4), pages 2020-2027, April.
    51. Duke, Richard & Williams, Robert & Payne, Adam, 2005. "Accelerating residential PV expansion: demand analysis for competitive electricity markets," Energy Policy, Elsevier, vol. 33(15), pages 1912-1929, October.
    52. Richter, Mario, 2013. "German utilities and distributed PV: How to overcome barriers to business model innovation," Renewable Energy, Elsevier, vol. 55(C), pages 456-466.
    53. Cherrington, R. & Goodship, V. & Longfield, A. & Kirwan, K., 2013. "The feed-in tariff in the UK: A case study focus on domestic photovoltaic systems," Renewable Energy, Elsevier, vol. 50(C), pages 421-426.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Oliva H., Sebastian & Passey, Rob & Abdullah, Md Abu, 2019. "A semi-empirical financial assessment of combining residential photovoltaics, energy efficiency and battery storage systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 206-214.
    2. Mehigan, L. & Deane, J.P. & Gallachóir, B.P.Ó. & Bertsch, V., 2018. "A review of the role of distributed generation (DG) in future electricity systems," Energy, Elsevier, vol. 163(C), pages 822-836.
    3. Rosa, Carmen Brum & Rigo, Paula Donaduzzi & Rediske, Graciele & Moccellin, Ana Paula & Mairesse Siluk, Julio Cezar & Michels, Leandro, 2021. "How to measure organizational performance of distributed generation in electric utilities? The Brazilian case," Renewable Energy, Elsevier, vol. 169(C), pages 191-203.
    4. L. (Lisa B.) Ryan & Sarah La Monaca & Linda Mastrandrea & Petr Spodniak, 2018. "Harnessing electricity retail tariffs to support climate change policy," Open Access publications 10197/9911, School of Economics, University College Dublin.
    5. Oliva H, Sebastian, 2018. "Assessing the growth of residential PV exports with energy efficiency and the opportunity for local generation network credits," Renewable Energy, Elsevier, vol. 121(C), pages 451-459.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rutovitz, Jay & Oliva H., Sebastian & McIntosh, Lawrence & Langham, Ed & Teske, Sven & Atherton, Alison & Kelly, Scott, 2018. "Local network credits and local electricity trading: Results of virtual trials and the policy implications," Energy Policy, Elsevier, vol. 120(C), pages 324-334.
    2. Oliva H., Sebastian & MacGill, Iain & Passey, Rob, 2016. "Assessing the short-term revenue impacts of residential PV systems on electricity customers, retailers and network service providers," Renewable and Sustainable Energy Reviews, Elsevier, vol. 54(C), pages 1494-1505.
    3. Oliva H, Sebastian, 2018. "Assessing the growth of residential PV exports with energy efficiency and the opportunity for local generation network credits," Renewable Energy, Elsevier, vol. 121(C), pages 451-459.
    4. Oliva H., Sebastian & Passey, Rob & Abdullah, Md Abu, 2019. "A semi-empirical financial assessment of combining residential photovoltaics, energy efficiency and battery storage systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 206-214.
    5. Sommerfeldt, Nelson & Madani, Hatef, 2017. "Revisiting the techno-economic analysis process for building-mounted, grid-connected solar photovoltaic systems: Part one – Review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 1379-1393.
    6. Castaneda, Monica & Jimenez, Maritza & Zapata, Sebastian & Franco, Carlos J. & Dyner, Isaac, 2017. "Myths and facts of the utility death spiral," Energy Policy, Elsevier, vol. 110(C), pages 105-116.
    7. Mukherjee, Shilpi & Dhingra, Tarun & Sengupta, Anirban, 2017. "Status of Electricity Act, 2003: A systematic review of literature," Energy Policy, Elsevier, vol. 102(C), pages 237-248.
    8. Yu, Hyun Jin Julie, 2017. "Virtuous cycle of solar photovoltaic development in new regions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 1357-1366.
    9. Chaianong, Aksornchan & Tongsopit, Sopitsuda & Bangviwat, Athikom & Menke, Christoph, 2019. "Bill saving analysis of rooftop PV customers and policy implications for Thailand," Renewable Energy, Elsevier, vol. 131(C), pages 422-434.
    10. Comello, Stephen & Reichelstein, Stefan, 2017. "Cost competitiveness of residential solar PV: The impact of net metering restrictions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 46-57.
    11. Kubli, Merla, 2018. "Squaring the sunny circle? On balancing distributive justice of power grid costs and incentives for solar prosumers," Energy Policy, Elsevier, vol. 114(C), pages 173-188.
    12. Briguglio, Marie & Formosa, Glenn, 2017. "When households go solar: Determinants of uptake of a Photovoltaic Scheme and policy insights," Energy Policy, Elsevier, vol. 108(C), pages 154-162.
    13. Wang, Meng & Infante Ferreira, Carlos A., 2017. "Absorption heat pump cycles with NH3 – ionic liquid working pairs," Applied Energy, Elsevier, vol. 204(C), pages 819-830.
    14. Botelho, D.F. & de Oliveira, L.W. & Dias, B.H. & Soares, T.A. & Moraes, C.A., 2022. "Prosumer integration into the Brazilian energy sector: An overview of innovative business models and regulatory challenges," Energy Policy, Elsevier, vol. 161(C).
    15. Yan, Xiaohe & Gu, Chenghong & Li, Furong & Xiang, Yue, 2018. "Network pricing for customer-operated energy storage in distribution networks," Applied Energy, Elsevier, vol. 212(C), pages 283-292.
    16. L. (Lisa B.) Ryan & Sarah La Monaca & Linda Mastrandrea & Petr Spodniak, 2018. "Harnessing Electricity Retail Tariffs to Support Climate Change Policy," Working Papers 201822, School of Economics, University College Dublin.
    17. Chesser, Michael & Hanly, Jim & Cassells, Damien & Apergis, Nicholas, 2018. "The positive feedback cycle in the electricity market: Residential solar PV adoption, electricity demand and prices," Energy Policy, Elsevier, vol. 122(C), pages 36-44.
    18. World Bank, 2020. "Global Economic Prospects, June 2020," World Bank Publications - Books, The World Bank Group, number 33748.
    19. Melikoglu, Mehmet, 2017. "Vision 2023: Status quo and future of biomass and coal for sustainable energy generation in Turkey," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 800-808.
    20. Say, Kelvin & John, Michele & Dargaville, Roger & Wills, Raymond T., 2018. "The coming disruption: The movement towards the customer renewable energy transition," Energy Policy, Elsevier, vol. 123(C), pages 737-748.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:76:y:2017:i:c:p:932-940. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.