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

See all articles by Guillermo Pereira

Guillermo Pereira

Universidade de Coimbra - Faculty of Economics, Students ; Universidade de Coimbra - Faculty of Science and Technology, Students

Jan Martin Specht

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN)

Patricia Pereira da Silva

Universidade de Coimbra - Faculty of Economics; Universidade de Coimbra - Faculty of Science and Technology

Reinhard Madlener

RWTH Aachen University; Norwegian University of Science and Technology (NTNU)

Date Written: March 2018

Abstract

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

Pereira, Guillermo and Specht, Jan Martin and Pereira da Silva, Patricia and Madlener, Reinhard, Technology, Business Model, and Market Design Adaptation Toward Smart Electricity Distribution: Insights for Policy Making (March 2018). FCN Working Paper No. 03/2018, Available at SSRN: https://ssrn.com/abstract=3200509 or http://dx.doi.org/10.2139/ssrn.3200509

Guillermo Pereira (Contact Author)

Universidade de Coimbra - Faculty of Economics, Students ( email )

Coimbra
Portugal

Universidade de Coimbra - Faculty of Science and Technology, Students ( email )

Coimbra
Portugal

Jan Martin Specht

RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN) ( email )

Mathieustrasse 6
Aachen, 52074
Germany

HOME PAGE: http://www.fcn.eonerc.rwth-aachen.de

Patricia Pereira da Silva

Universidade de Coimbra - Faculty of Economics ( email )

Av. Dias da Silva, 165
Coimbra, 3004-512
Portugal

Universidade de Coimbra - Faculty of Science and Technology

Silvio Rua Lima
University of Coimbra - Campus II
Coimbra, 3030-790
Portugal

Reinhard Madlener

RWTH Aachen University ( email )

School of Business and Economics / E.ON ERC
Mathieustraße 10
Aachen, 52074
Germany
+49 241 80 49 820 (Phone)
+49 241 80 49 829 (Fax)

HOME PAGE: http://www.eonerc.rwth-aachen.de/fcn

Norwegian University of Science and Technology (NTNU) ( email )

Høgskoleringen
Trondheim NO-7491, 7491
Norway

HOME PAGE: http://https://www.ntnu.edu/employees/reinhard.madlener

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