Exploring regulatory boundaries of economic efficiency: a study of time-of-use network tariffs

The energy transition is driving unprecedented electricity demand as electrification increases, with many member states facing grid capacity shortages. National regulatory authorities (NRAs), supervising network operators, are exploring network tariff regimes to reduce peak electricity consumption. Time-of-use tariffs show promise in aligning with energy transition objectives such as energy efficiency, sustainability and energy justice. However, regulators remain strictly bound by economic efficiency. This article examines the extent to which these transitional objectives engage with, and potentially redefine, economic efficiency, and what this evolution means for the discretion available to NRAs in pursuing these transitional objectives within the boundaries of economic efficiency.