The “Smart Paradox”: Stimulate the deployment of smart grids with effective regulatory instruments

Marques, Vítor; Bento, Nuno; Costa, Paulo Moisés

doi:10.1016/j.energy.2014.01.007

Cited by 24 publications

(30 citation statements)

References 24 publications

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“…new sensors, controllers), the integration of ICT infrastructure (e.g. software technologies, communication protocols) in the distribution system, and the implementation of innovative projects (Fox-Penner, 2010;Marques et al, 2014). The innovation path can be pursued through pilot 1 projects that advance our knowledge of the real-time operation of the grid.…”

Section: Introductionmentioning

confidence: 98%

“…Since DSOs are regulated entities that have to cover their costs through regulated revenues only (Eurelectric, 2014), the unenviable job of balancing the expected benefits from SG investments with their capital costs will fall to national regulators (Fox-Penner, 2010). In this respect, regulation can have an important role in setting up a framework that fosters investment in SG development (Marques et al, 2014).…”

Section: Introductionmentioning

confidence: 99%

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Market and regulatory factors influencing smart-grid investment in Europe: Evidence from pilot projects and implications for reform

et al. 2016

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a b s t r a c tElectricity distribution system operators (DSOs) are expected to invest heavily in system innovation in the form of smart grids (SG) in order to help achieve energy policy goals. In this context, regulatory reforms to spur DSOs investments are considered a policy priority. Based on a review of the European regulatory status and using a dataset of 459 innovative SG projects, this study focuses on market and regulatory factors and performs a series of statistical tests to investigate how the different factor levels affecting SG investments in Europe. The results show that (1) lower market concentration in the electricity distribution sector (2) the use of incentive-based regulatory schemes; and (3) the adoption of innovation-stimulus mechanisms are key enablers of SG investments.

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Section: Introductionmentioning

confidence: 98%

Section: Introductionmentioning

confidence: 99%

Market and regulatory factors influencing smart-grid investment in Europe: Evidence from pilot projects and implications for reform

et al. 2016

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“…The deduction of such a general model, that recreates a typical input based regulatory framework applied to natural monopolies, was presented by the authors in a separate paper (Marques et al, 2014). The main features of this model are highlighted in the following paragraphs.…”

Section: The Modelmentioning

confidence: 99%

“…Hence, Marques et al (2014) show that, whenever SGs investments avoid the need for expensive conventional investments, a pure incentive regulation (α = γ = 0 and A = +∞) applied in CAPEX and OPEX is the most suitable regulatory scheme. Under a price cap regulation, the firm would only invest in SGs if the perpetual rent of the avoided costs is larger than the initial investment.…”

Section: Isg Is the Amount Invested In Sg Technologymentioning

confidence: 99%

“…This paper progresses over a previous decision model developed by the authors (Marques et al, 2014), based on foreseen discounted cash flows like in Guthrie (2006), by explicitly dealing with the uncertainties surrounding the expected performances of an immature technology. Specifically, the model evaluates the economic incentives for the firm to undertake projects with the potential to reduce both capital and operational costs (other benefits with externalities and public goods nature are not considered in the present version of the model).…”

Section: Introductionmentioning

confidence: 99%

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The Impact of Regulation on a Firm’s Incentives to Invest in Emergent Smart Grid Technologies

Costa¹,

Bento²,

Marques³

2017

The Energy Journal

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This paper analyzes the implementation of new technologies in network industries through the development of a suitable regulatory scheme. The analysis focuses on Smart Grid (SG) technologies which, among others benefits, could save operational costs and reduce the need for further conventional investments in the grid. In spite of the benefits that may result from their implementation, the adoption of SGs by network operators can be hampered by the uncertainties surrounding actual performances. A decision model has been developed to assess the firms' incentives to invest in "smart" technologies under different regulatory schemes. The model also enables testing the impact of uncertainties on the reduction of operational costs, and of conventional investments. Under certain circumstances, it may be justified to support the development and early deployment of emerging innovations that have a high potential to ameliorate the efficiency of the electricity system, but whose adoption face many uncertainties.

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Adaptive Multi-agent System for Smart Grid Regulation with Norms and Incentives

Rúbio

Cardoso

Oliveira

2016

Technological Innovation for Cyber-Physical Systems

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Regulatory policies applied to traditional energy systems are not sufficient when considering smart grids' new requirements such as distributed and decentralised coordination. New management techniques are needed in order to shape consumers conducts by prohibiting, sanctioning or incentivising specific behaviours leading to more efficient utilisation of resources. This paper discusses the possibility of regulating demand in smart grids by the application of processes reflecting the utilisation of norms and incentives in order to better adjust supply to demand. Thus we consider this soft-control policy based on the business layer rather than traditional control for cyber-physical systems. The Business Process Modelling (BPM) approach will make easier the design, management and observation of the norms and incentives as flexible artefacts, highlighting decision and coordination processes.

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The “Smart Paradox”: Stimulate the deployment of smart grids with effective regulatory instruments

Cited by 24 publications

References 24 publications

Market and regulatory factors influencing smart-grid investment in Europe: Evidence from pilot projects and implications for reform

Market and regulatory factors influencing smart-grid investment in Europe: Evidence from pilot projects and implications for reform

The Impact of Regulation on a Firm’s Incentives to Invest in Emergent Smart Grid Technologies

Adaptive Multi-agent System for Smart Grid Regulation with Norms and Incentives

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