Cleaner, Smarter, Cheaper: Network Tariff Design for a Smart Future

This paper provides recommendations for network tariff design that will support the realization of the European Union’s clean energy vision in a timely fashion, at least cost and with an equitable distribution of the costs and benefits among consumers. The paper presents the state of play for network charges in Europe; describes why fixed charges are undesirable; recommends certain high-level principles of smart tariff design and provides concrete examples of such tariffs, along with practical recommendations about the appropriate tariff design for different consumer classes and uses.