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Smart-grid investments, regulation and organization


  • Agrell, Per J.
  • Bogetoft, Peter
  • Mikkers, Misja


Grid infrastructure managers worldwide are facing demands for reinvestments in new assets with higher on-grid and off-grid functionality in order to meet new environmental targets. The roles of the current actors will change as the vertical interfaces between regulated and unregulated tasks become blurred. In this paper, we characterize some of the effects of new asset investments policy on the network tasks, assets and costs and contrast this with the assumptions of the current economic network regulation. To provide structure, we present a model of investment provision under regulation between a distribution system operator and a potential investor–generator. The results from the model confirm the hypothesis that network regulation should find a focal point, should integrate externalities in the performance assessment and should avoid wide delegation of contracting-billing for smart-grid investments.

Suggested Citation

  • Agrell, Per J. & Bogetoft, Peter & Mikkers, Misja, 2013. "Smart-grid investments, regulation and organization," Energy Policy, Elsevier, vol. 52(C), pages 656-666.
  • Handle: RePEc:eee:enepol:v:52:y:2013:i:c:p:656-666 DOI: 10.1016/j.enpol.2012.10.026

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    Cited by:

    1. Koliba, Christopher & DeMenno, Mercy & Brune, Nancy & Zia, Asim, 2014. "The salience and complexity of building, regulating, and governing the smart grid: Lessons from a statewide public–private partnership," Energy Policy, Elsevier, vol. 74(C), pages 243-252.
    2. repec:eee:rensus:v:81:y:2018:i:p1:p:524-535 is not listed on IDEAS
    3. Agrell, Per J. & Bogetoft, Peter & Mikkers, Misja, 2013. "Smart-grid investments, regulation and organization," Energy Policy, Elsevier, vol. 52(C), pages 656-666.
    4. de Reuver, Mark & van der Lei, Telli & Lukszo, Zofia, 2016. "How should grid operators govern smart grid innovation projects? An embedded case study approach," Energy Policy, Elsevier, vol. 97(C), pages 628-635.
    5. Hall, Stephen & Foxon, Timothy J., 2014. "Values in the Smart Grid: The co-evolving political economy of smart distribution," Energy Policy, Elsevier, vol. 74(C), pages 600-609.
    6. Ruester, Sophia & Schwenen, Sebastian & Batlle, Carlos & Pérez-Arriaga, Ignacio, 2014. "From distribution networks to smart distribution systems: Rethinking the regulation of European electricity DSOs," Utilities Policy, Elsevier, vol. 31(C), pages 229-237.
    7. Munish Manas, 2015. "Development of preferential regulations, transmission tariffs, and critical technological components for the promotion of smart grid globally," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2015(2), pages 107-130.
    8. Crispim, João & Braz, José & Castro, Rui & Esteves, Jorge, 2014. "Smart Grids in the EU with smart regulation: Experiences from the UK, Italy and Portugal," Utilities Policy, Elsevier, vol. 31(C), pages 85-93.
    9. Agrell, Per J. & Brea-Solís, Humberto, 2017. "Capturing heterogeneity in electricity distribution operations: A critical review of latent class modelling," Energy Policy, Elsevier, vol. 104(C), pages 361-372.
    10. Martin-Martínez, F. & Sánchez-Miralles, A. & Rivier, M., 2016. "A literature review of Microgrids: A functional layer based classification," Renewable and Sustainable Energy Reviews, Elsevier, vol. 62(C), pages 1133-1153.
    11. repec:eee:appene:v:206:y:2017:i:c:p:22-31 is not listed on IDEAS
    12. Boßmann, Tobias & Eser, Eike Johannes, 2016. "Model-based assessment of demand-response measures—A comprehensive literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1637-1656.
    13. Fadaeenejad, M. & Saberian, A.M. & Fadaee, Mohd. & Radzi, M.A.M. & Hizam, H. & AbKadir, M.Z.A., 2014. "The present and future of smart power grid in developing countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 828-834.
    14. repec:eee:rensus:v:81:y:2018:i:p1:p:1329-1349 is not listed on IDEAS
    15. He, Yongxiu & Xu, Yang & Pang, Yuexia & Tian, Huiying & Wu, Rui, 2016. "A regulatory policy to promote renewable energy consumption in China: Review and future evolutionary path," Renewable Energy, Elsevier, vol. 89(C), pages 695-705.
    16. Paulo Moisés Costa & Nuno Bento & Vítor Marques, 2014. "Dealing with Technological Risk in a Regulatory Context: The Case of Smart Grids," GEMF Working Papers 2014-11, GEMF, Faculty of Economics, University of Coimbra.
    17. repec:eee:enepol:v:109:y:2017:i:c:p:794-806 is not listed on IDEAS
    18. Francesco Pasimeni, 2017. "Adoption and Diffusion of Micro-Grids in Italy. An Analysis of Regional Factors Using Agent-Based Modelling," SPRU Working Paper Series 2017-09, SPRU - Science and Technology Policy Research, University of Sussex.
    19. Balta-Ozkan, Nazmiye & Davidson, Rosemary & Bicket, Martha & Whitmarsh, Lorraine, 2013. "The development of smart homes market in the UK," Energy, Elsevier, vol. 60(C), pages 361-372.

    More about this item


    Networks; Investments; Regulation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation


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