Electricity prices and tariffs to keep everyone happy: A framework for fixed and nodal prices coexistence in distribution grids with optimal tariffs for investment cost recovery

Some consumers, particularly households, are unwilling to face volatile electricity prices, and they can perceive as unfair price differentiation in the same local area. For these reasons, nodal prices distribution networks rarely employed. However, increasing availability of renewable resources emerging price-elastic behaviours pave way for effective introduction marginal pricing schemes networks. The aim proposed framework is show how traditional non-flexible consumers coexist with flexible users a Flexible will pay whereas be charged fixed derived from underlying prices. Moreover, developed approach shows system operator should manage grid by optimally determining lines expanded, collected network tariff levied on users, while accounting both congestion rent investment costs. model formulated non-linear integer bilevel program, which then recast an equivalent single optimization problem, using algebra complementarity relations. power flows area modelled resorting second-order cone relaxation, whose solution exact radial under mild assumptions. final results mixed-integer quadratically constrained solved off-the-shelf solvers. Numerical test cases based 5-bus 33-bus reported effectiveness method.