J. Ilg, C. Flath, and J. Krämer. Proceedings of the 9th International Conference on the EuropeanEnergy Market (EEM), page 1-6. Florence, Italy, 10-12 May 2012, IEEE, (2012)ISBN 978-1-4673-0832-8.
Imbalances in generation and demand locality in the German power
market give rise to seemingly unfair grid cost allocations: few customers in
wind-rich north-east Germany pay a major share of the costs of transmitting
power to customers in the south. This development has prompted demands for billing
the extend of grid usage - i.e., a customer's costs should be lower when procuring
`local' power than in the case of distant power. We call this a `metered' grid
costs approach as opposed to the standard global levy. Using an economic model
we find that such metered grid costs may increase total welfare by inducing
higher cost efficiency. However, they will typically also give rise to
significantly higher consumer costs as generators may leverage grid costs as
differentiation devices to enhance their profits.