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From vertical to horizontal unbundling: A downstream electricity reliability insurance business model

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  • Fuentes, Rolando
  • Blazquez, Jorge
  • Adjali, Iqbal

Abstract

Distributed energy resource technologies (DERs) allow consumers to generate, trade, reduce, and shift their electricity consumption, largely bypassing traditional utilities. DERs can reduce consumer reliance on the grid, and in the most extreme scenario self-sufficient consumers could disconnect from the grid and avoid all external charges. However, since most DERs delivers energy, but not reliable capacity, it would be in the interests of most of these consumers to stay connected to the networks, in the event their system fails. Such a ‘pay as you go’ price scheme would not reflect the opportunity cost of electricity firms' sudden idle infrastructure though.

Suggested Citation

  • Fuentes, Rolando & Blazquez, Jorge & Adjali, Iqbal, 2019. "From vertical to horizontal unbundling: A downstream electricity reliability insurance business model," Energy Policy, Elsevier, vol. 129(C), pages 796-804.
    • Handle: RePEc:eee:enepol:v:129:y:2019:i:c:p:796-804
    DOI: 10.1016/j.enpol.2019.02.068
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    Cited by:

    1. Dongwei Zhao & Hao Wang & Jianwei Huang & Xiaojun Lin, 2022. "Insurance Contract for High Renewable Energy Integration," Papers 2209.10363, arXiv.org.
    2. Fuentes, Rolando & Sengupta, Abhijit, 2020. "Using insurance to manage reliability in the distributed electricity sector: Insights from an agent-based model," Energy Policy, Elsevier, vol. 139(C).
    3. Gonçalves, Luisa & Patrício, Lia, 2022. "From smart technologies to value cocreation and customer engagement with smart energy services," Energy Policy, Elsevier, vol. 170(C).
    4. Rolando Fuentes & Lester C. Hunt & Hector Lopez-Ruiz & Baltasar Manzano, 2020. "The “iPhone effect†: The impact of dual technological disruptions on electrification," Competition and Regulation in Network Industries, , vol. 21(2), pages 110-123, June.

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