The electricity pricing model was created and very successful (for about a century) for firm, "centralised" generation, mainly hydroelectric and thermal.
Recently, important changes have occurred. Generation has also become "distributed" and from non-firm sources. And of course, the cost associated with these innovations has become very different and variable with respect to the traditional format!
The current challenge is linked to the fact that the current tariff model is no longer tied to the actual costs incurred.
This creates a mismatch that ends up being passed on to all consumers. The correct approach would be for each consumer to pay the actual cost incurred and not a "prorated" as it is now.
This would encourage everyone to consume in the most efficient way, which would ultimately benefit everyone!
My thesis is to use hourly pricing to reflect energy and demand costs incurred in each region. This signaling would bring balance to the system, achieving therefore the much-needed meritocracy of costs.
Anyone wishing to explore this concept further is welcome to reach me!