Restructuring electricity tariffs-Through a structure that reduces variable costs, it is possible to incentivize more consumption.

Autor: Khan, Ammar Habib
Předmět:
Zdroj: Energy Update; Jun2024, p1-89, 89p
Abstrakt: The article discusses the complexities of electricity tariffs and the need for restructuring them to incentivize more consumption and address cash flow issues in the power value chain. Currently, consumer tariffs are largely determined through a cost-plus mechanism, with variable costs (fuel prices) and fixed costs (capacity costs) making up the overall tariff. The variability of temperature in the country leads to higher demand during the summer, requiring additional capacity and increasing costs. The article suggests introducing a fixed component to the tariff, along with lower variable costs, to smooth cash flow and potentially reduce bills during the summer while increasing them slightly during the winter. This restructuring could also incentivize growth in electricity consumption, which has been declining in recent years. The article emphasizes the need for careful consideration of the fixed costs to ensure they do not exceed a certain threshold of monthly household income for vulnerable segments. Overall, restructuring tariffs is seen as a necessary step in reforming the power sector and can have positive impacts on both businesses and households. [Extracted from the article]
Databáze: Complementary Index