Technology, Business Model, and Market Design Adaptation Toward Smart Electricity Distribution: Insights for Policy Making
FCN Working Paper No. 03/2018
41 Pages Posted: 12 Jul 2018
Date Written: March 2018
The ongoing European Union sustainable energy transition has a disruptive potential regarding the role of infrastructure and utilities in the electricity sector. The increased spread of digital technologies, renewable energy sources, and prosumers calls for a swift and well-guided adaptation of the electricity distribution industry towards a smart grids context. We analyze the challenges and opportunities associated with this adaptation through nine multi-stakeholder workshops, held in Germany and Portugal in 2016 – 2017, engaging distribution system operators (DSOs), researchers, academics, and integrated utility companies to obtain up-to-date insights. Our results indicate uncertainty regarding the value of large-scale rollout of smart meters for DSOs. Also, a corporate culture with resistance to change is observed, challenging the integration of novel technologies and processes. Traditional regulation is seen as a barrier to smart grid investments, is associated with job losses, and knowledge destruction. Policy-makers can benefit from these insights by taking them into account in policy design and market restructuring.
Keywords: electricity distribution, smart grid, technology, business model, market design, policy
JEL Classification: O18, O25, O33, Q41
Suggested Citation: Suggested Citation