Forward-looking distribution network charges considering lumpy investments

Many regulators are pushing for more cost-reflective distribution network charges to inform end users of the grid infrastructure costs their behavior causes. Since future investment can be avoided by reducing simultaneous peak loads, forward-looking, coincident often proposed. Under assumption convex costs, it has been shown that optimal signal long-run marginal triggering an trade-off between expansion and load reduction. In practice, however, investments lumpy, requiring engineering methods estimate ill-defined based on long-term demand forecasts. this paper, we derive forward-looking charge set a social welfare maximizing regulator, endogenously considering lumpiness uncertain consumer demand. While tariff still equals in essence, now depends multitude network- demand-related parameters. Our results demonstrate require accurate information willingness pay demand, which currently is typically unknown regulators.