Pricing for integrated electricity and gas systems based on long-run incremental cost

Xiaohe Yan, Xinhe Yang, Hantao Wang, Chenghong Gu, Furong Li

Research output: Chapter in Book/Report/Conference proceedingConference contribution

2 Citations (Scopus)

Abstract

Different energy vectors, such as electricity and natural gas, are becoming closely linked by new technologies, providing a more reliable and flexible energy supply. Due to the increasing complexity and interdependency, it is essential to set pricing signals for the integrated energy systems to recover the corresponding long-term investment cost. However, the current practice is to price the two systems separately, which cannot respect their increasing linkage. This paper extrapolates the longrun incremental cost (LRIC) pricing from electricity networks to integrated gas and electricity systems, setting system prices for both of them in a combined form. It is assumed that the two energy systems are linked by Combined Heat and Power (CHP). The pricing scheme works by translating the impacts from system utilisation caused by customers into economic signals. It can help network operators to recover investment cost and at the same time provide forward-looking cost signals to guide the use of integrated systems.

Original languageEnglish
Title of host publicationIEEE Power and Energy Society General Meeting (PESGM), 2017
PublisherIEEE
Pages1-5
Number of pages5
ISBN (Electronic)9781538622124
DOIs
Publication statusPublished - 29 Jan 2018
Event2017 IEEE Power and Energy Society General Meeting, PESGM 2017 - Chicago, IL USA, Chicago, USA United States
Duration: 16 Jul 201720 Jul 2017
http://www.pes-gm.org/2017/

Conference

Conference2017 IEEE Power and Energy Society General Meeting, PESGM 2017
Abbreviated titlePESGM 2017
CountryUSA United States
CityChicago
Period16/07/1720/07/17
Internet address

Keywords

  • Gas network
  • Integrated system
  • Long-run incremental cost pricing
  • Network charges

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Nuclear Energy and Engineering
  • Renewable Energy, Sustainability and the Environment
  • Electrical and Electronic Engineering

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