New trends in electricity pricing in Sweden from a utility perspective
- Goeteborg Energi Naet (Sweden)
Sweden is facing a re-structured electricity market beginning January 1, 1996, implying full competition in the purchasing and selling of electricity. The transmission and distribution of electricity will remain as a franchised monopoly and this business has to be strictly separated from the electricity trading. In the monopolistic environment, pricing of electricity has been based on more or less relevant costs and a resonable rate of return. The energy charges have reflected the system short range marginal costs while the demand and fixed charges have been adapted to give a total cost level corresponding to the system average cost. Tariffs of this type, known as time-of-use tariffs, have stimulated peak shaving during peak load (high cost hours) and valley filling during low load (low cost hours), increasing the load factor. Restructuring will influence the pricing in several ways. Pricing of transmission and distribution services will be based on costs and will be supervised by a new state authority. The network tariffs within local areas will be distance independent and the customers will be able to distinguish the transportation costs from the costs for electricity supply and taxes on the bill. Pricing of electricity supply will be influenced by the market and the strength of competition. However, as customers don`t value electricity itself, but the benefits of electricity use, there will be a strong trend for utilities to market energy services like light, power, space heating, indoor climate control, district cooling, etc., instead of kilowatt-hours. The price for these services will include a number of items and will be individually negotiated and adapted to the customer needs. A business concept of this type also offers possibilities for energy efficiency measures to be taken within the energy service agreement. Recently, more and more attention has been paid to the idea of green pricing of electricity.
- Research Organization:
- Electric Power Research Inst., Palo Alto, CA (United States)
- OSTI ID:
- 254483
- Report Number(s):
- EPRI-TR--106232; CONF-960330--
- Country of Publication:
- United States
- Language:
- English
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