Fixed charges impede progress & drive up costs of the clean energy transition
The EU commitment to the clean energy transition recognizes that consumers will play an active role in the energy market—but tariffs must be designed to encourage that.
This short fact sheet reviews the significance of network charges, their role in driving inefficient consumption and higher costs, how other industries recoup fixed costs through per-unit pricing, and how tariff design can empower customers and drive Europe’s clean energy transition. To align tariff design with the EU’s broader clean energy goals, RAP recommends clarifying the guidance on “cost-reflectivity” to refer to the principle that a consumer should pay for the costs they impose on the network, not to the nature of specific customer charges. We also recommend that Member States’ develop network tariff options for recovering all network costs based on the following principles:
- A customer should be able to connect to the grid for no more than the cost of connecting to the grid.
- Customers should pay for grid services in proportion to how much and when they use the grid.
- Customers who generate electricity should cover their fair share of grid costs, by paying more to use the grid when it’s heavily loaded, but less when it’s not.