Utility 2.0: A Multi-Dimensional Review of New York's Reforming the Energy Vision (REV) and Great Britain's RIIO Utility Business Models

University of Delaware, Center for Energy & Environmental Policy, Utility of the Future Working Paper Series, December 2016

39 Pages Posted: 2 Apr 2018 Last revised: 22 Sep 2018

See all articles by Annette Brocks

Annette Brocks

MIT Institute for Data, Systems

Joseph Nyangon

Center for Energy and Environmental Policy, University of Delaware

Job Taminiau

University of Delaware - Center for Energy and Environmental Policy (CEEP)

Date Written: December 21, 2016

Abstract

A powerful confluence of architectural, technological, and socio-economic forces is transforming the U.S. electricity market. These trends and developments are placing tremendous pressure on utilities triggering changes in electricity production, transmission, and consumption. Increased democratized choice over energy usage, for instance, is empowering consumers to take key actions such as peak shaving, flexible loading, and installation of grid automation and intelligence solutions. A key step to achieving full benefits of these programs is repurposed Utility 2.0 concepts: the distributed grid, innovations in electric market design, real-time automated monitoring and verification, deployment of microgrids, increased uptake of ‘smart meters and smarter’ grids, and investment in data analytics in order to incentivize efficient market design and flexibility. Using a seven-part multi-dimensional framework, this paper examines the role of infrastructure network, revenue models, customer interface, business model resilience, organizational logic and mandate, risk management, and value proposition in improving communication with consumers and operational boundary of utilities in the new utility business model regime. The paper also assesses two prominent utility business models, the New York’s Reforming the Energy Vision (REV) and Great Britain’s ‘Revenue = Incentives Innovation Outputs” (RIIO) legislation in order to illustrate potential changes that await the energy utility actors. We conclude that positioning the ‘business model’ as the unit for analysis provides a robust and multi-dimensional tool for evaluating the suitability of new proposals for electric utilities and energy governance.

Keywords: Utility 2.0, Utility business model, Multi-dimensional analysis, Reforming the Energy Vision, RIIO

JEL Classification: O21, O33, O43, O52, P48, P52, P11, P21

Suggested Citation

Brocks, Annette and Nyangon, Joseph and Taminiau, Job, Utility 2.0: A Multi-Dimensional Review of New York's Reforming the Energy Vision (REV) and Great Britain's RIIO Utility Business Models (December 21, 2016). University of Delaware, Center for Energy & Environmental Policy, Utility of the Future Working Paper Series, December 2016. Available at SSRN: https://ssrn.com/abstract=3146620 or http://dx.doi.org/10.2139/ssrn.3146620

Annette Brocks

MIT Institute for Data, Systems ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

Joseph Nyangon (Contact Author)

Center for Energy and Environmental Policy, University of Delaware ( email )

278 Graham Hall
Newark, DE DE 19716
United States

Job Taminiau

University of Delaware - Center for Energy and Environmental Policy (CEEP) ( email )

Graham Hall
Newark, DE 19716
United States

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