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Smart electricity distribution networks, business models, and application for developing countries


  • Jamasb, Tooraj
  • Thakur, Tripta
  • Bag, Baidyanath


The electricity distribution industry in the developing world is dominated by public sector utilities. These utilities are technically and economically inefficient and face large financial losses that prevent further development of the networks. The reforms are introduced to unbundle the vertically integrated utilities and introduce private investment and management, but these efforts often fail due to poorly designed market and incentive models. Focusing on the electricity distribution in developing countries, we propose a business model based on organizing the utilities into distinct activities and businesses. In many developing countries political economy and weak investment conditions do not favour full privatization of utilities. However, in some activities ‘competition for the market’ and ‘management contracts’ can provide a partial role for the private actors. The model is based on the concepts of enterprise innovation, emphasizing external collaboration and partnerships and can be operationalized via specialization, where some specific tasks are outsourced. The proposed model can also be applied to developed countries as the energy sectors of both developing and developed countries are undergoing transformation due to new technologies such as communications, distributed generation (DGs), and active demand response.

Suggested Citation

  • Jamasb, Tooraj & Thakur, Tripta & Bag, Baidyanath, 2018. "Smart electricity distribution networks, business models, and application for developing countries," Energy Policy, Elsevier, vol. 114(C), pages 22-29.
  • Handle: RePEc:eee:enepol:v:114:y:2018:i:c:p:22-29
    DOI: 10.1016/j.enpol.2017.11.068

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    References listed on IDEAS

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    3. Chirambo, Dumisani, 2018. "Towards the achievement of SDG 7 in sub-Saharan Africa: Creating synergies between Power Africa, Sustainable Energy for All and climate finance in-order to achieve universal energy access before 2030," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 600-608.
    4. Dall-Orsoletta, Alaize & Romero, Fernando & Ferreira, Paula, 2022. "Open and collaborative innovation for the energy transition: An exploratory study," Technology in Society, Elsevier, vol. 69(C).
    5. Anwar, Ahsan & Sharif, Arshian & Fatima, Saba & Ahmad, Paiman & Sinha, Avik & Khan, Syed Abdul Rehman & Jermsittiparsert, Kittisak, 2021. "The asymmetric effect of public private partnership investment on transport CO2 emission in China: Evidence from quantile ARDL approach," MPRA Paper 108160, University Library of Munich, Germany, revised 2021.
    6. Verma, Mandhir Kumar & Mukherjee, V. & Kumar Yadav, Vinod & Ghosh, Santosh, 2020. "Indian power distribution sector reforms: A critical review," Energy Policy, Elsevier, vol. 144(C).
    7. Li, Longxi, 2021. "Coordination between smart distribution networks and multi-microgrids considering demand side management: A trilevel framework," Omega, Elsevier, vol. 102(C).

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    More about this item


    Electricity network; Privatization; Energy sector reform; Business model; Developing countries;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities


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