Impact of Tariff Schemes on Distribution Network Expansion Planning: a Comparative Framework

Achieving Europe’s decarbonization objectives requires a deep electrification of end-use sectors. This transition imposes unprecedented stress on distribution networks, which must accommodate higher peak loads, bidirectional power flows from distributed generation, and increased variability from weather-dependent sources. Addressing these challenges demands not only physical reinforcement but also economic instruments capable of steering consumer behavior toward grid-compatible operation. This thesis develops a comparative optimization framework to assess how different tariff schemes influence both user-side investment decisions and network development. The model integrates a detailed Distribution Network Expansion Planning (DNEP) formulation with Prosumer Energy System (PES) models. Two coordination regimes are compared: a centralized benchmark, where a social planner co-optimizes all assets to minimize total system cost, and a decentralized configuration, where prosumers act independently to minimize their own bills while the Distribution System Operator (DSO) reinforces the grid to ensure its safe operation. By contrasting these two regimes, the framework identifies how various tariff structures guide decentralized decisions relative to the system-wide optimum. Results demonstrate that tariff design decisively shapes grid evolution and prosumer strategies, but its effectiveness is strongly context-dependent, influenced by technological costs and resource availability.