demanding consumers and transport costs for electricity ex- ported out of the local grid on behalf of consumers able to deliver local demand and supply flexibility. This makes it more expensive for everybody because it requires more investments in grid capacity. The consumer gets the lowest electricity prices if local cheap marginal electricity capacity exceeds local demand, and sur- plus electricity production can be exported to neighbouring price areas. Companies and consumers producing electricity for their own use decrease local demand and support low mar- ginal electricity prices for all.
ly, and consumers have often paid the natural gas-related electricity price around 2.5 times higher than the natural gas price per kWh. When the renewable share of capacity is get- ting higher than demand, the number of hours where natural gas power alone will set the market price will decrease. At that point, electricity prices will drop. Countries dependent on coal or nuclear power alone produc- tion for marginal electricity production have managed better, and prices have not increased as much as for natural gas pow- er alone countries. Countries with natural gas CHP setting the marginal electricity price have managed much better than power-alone countries, primarily when CHP plants also use other fuels like waste for waste incineration, biomass, residues, coal, and biomethane CHP. Having electric interconnectors to other countries will only benefit your consumers if the price in the neighbouring area is below your own. Suppose your country is situated between a neighbouring price area with high prices and another with low prices. In that case, your price will always be between the two depending on the connector capacity. Suppose capacity is the same for both cables to neighbouring price areas. In that case, your area will mainly deliver transition capacity, and your price will be close to the country with the highest electricity price. The price difference between the two areas should pay for the interconnectors' cost, including electricity loss costs. If the economy on interconnectors is not transparent, there is a risk that the end consumer will pay costs unrelated to con- sumption, leading to higher tariffs. If interconnectors lead to higher tariffs for consumers, it can be considered to increase tariffs for producers using the interconnectors for export and transition. Electricity tariffs often discriminate against certain consumers and flexibility providers. An electricity kWh tariff may give high incentives for energy conservation but indirectly tends to sup- port energy loss in the transportation and production systems by discriminating solutions with low marginal transportation costs. Suppose the electricity tariff system supports flexibility for avoiding expensive import of electricity from neighbouring areas and electricity production by high loss (high marginal price) in peak hours. In this case, the share of low marginal price electricity will be higher and decrease overall costs for all. Additionally, tariff systems often cross-subsidize high-capacity
Learning 5: Expand solar, wind turbine, and water turbine ca- pacity – lowest marginal prices.
Learning 6: If fuel-based capacity is needed, establish only CHP – income from the heat side decreases marginal electric- ity price. Place CHP plants nearby industry and heat networks or establish a heat network if necessary. Learning 7: Monitor the economy on interconnectors. Inter- connectors do not necessarily deliver lower prices for consum- ers. The price difference must pay heat loss in interconnectors. Learning 8: If local solutions can avoid investments in trans- mission lines (interconnectors), share saved investments with consumers delivering solutions. This benefit depends on how local solutions can be established to the same costs as large, centralised solutions. Additionally, the security of supply can be achieved. Learning 9: Allow direct lines and energy communities, which will decrease local demand and increase the number of hours with low marginal electricity prices.
Learning 10: The electricity tariff system should support flexi- bility, and payments should follow actual costs.
Learnings getting low-cost heat sector: If the heating sector is primarily based on individual solutions using fuels or electricity, the consumers are exposed to price variations directly. The better the building standards, the less exposed consumers are to increasing prices, which can ex- plain why some countries with good building standards man- age better. Heat pumps for individual buildings are more ef- ficient than other individual technologies. Still, if the power
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