The Italian reform of electricity tariffs for non household customers: The impact on distributed generation and energy storage

The Italian legislative decree 210/2015, converted into law 21/2016 (known as Milleproroghe Decree) sets out that the regulatory authority for electricity, gas and water must re-determine by January 2018 the structure of the electricity tariff components related to the system costs applied to non household customers. The objectives of this reform are: (i) promote more efficient consumption practices, currently penalized by unattractive electricity tariffs, (ii) simplify the electricity bills, making them more readable, (iii) make the system costs more adherent to the actual dispatching costs and (iv) reduce the dependence of these costs from the energy demand. Currently, three different hypotheses have been formulated and are still under discussion. All of them propose a trinomial structure, made up of a fixed part and of two variable components, defined respectively as a function of the peak power demand and of the energy demand. The main purpose of this contribution is to investigate how the reform of the electricity tariffs could affect the diffusion of Energy Storage Systems (ESS) in support of Distributed Generation (DG) based on Renewable Energy Sources (RES). ESS have recently been subject of great interest among the energy market, due to their possible role in the increase of the host capacity of RES. The installation of ESS could help to overcome the main drawbacks of RES (i.e. intermittency and uncertainty), by increasing the share of self-consumption and improving the reliability of electricity distribution systems. Nevertheless, the economic feasibility of the installation of ESS is still uncertain, because the revenues coming from the increase of self-consumption are usually not sufficient to cover the investment costs. This work presents a detailed analysis of the electricity tariffs reform impact on DG and ESS for non household customers under different conditions.