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Values in the Smart Grid: The co-evolving political economy of smart distribution


  • Hall, Stephen
  • Foxon, Timothy J.


Investing in smart grid infrastructure is a key enabler for the transition to low carbon energy systems. Recent work has characterised the costs and benefits of individual “smart” investments. The political economy of the UK electricity system, however, has co-evolved such that there is a mismatch between where benefits accrue and where costs are incurred, leading to a problem of value capture and redeployment. Further, some benefits of smart grids are less easy to price directly and can be classified as public goods, such as energy security and decarbonisation. This paper builds on systemic treatments of energy system transitions to characterise the co-evolution of value capture and structural incentives in the electricity distribution system, drawing on semi-structured interviews and focus groups undertaken with smart grid stakeholders in the UK. This leads to an identification of municipal scale values that may be important for business models for the delivery of smart infrastructure. Municipalities may thus pursue specific economic opportunities through smart grid investment. This supports recent practical interest in an expanded role for municipalities as partners and investors in smart grid infrastructures.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:enepol:v:74:y:2014:i:c:p:600-609
    DOI: 10.1016/j.enpol.2014.08.018

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    References listed on IDEAS

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    1. repec:eee:enepol:v:114:y:2018:i:c:p:22-29 is not listed on IDEAS
    2. Eid, Cherrelle & Bollinger, L. Andrew & Koirala, Binod & Scholten, Daniel & Facchinetti, Emanuele & Lilliestam, Johan & Hakvoort, Rudi, 2016. "Market integration of local energy systems: Is local energy management compatible with European regulation for retail competition?," Energy, Elsevier, vol. 114(C), pages 913-922.
    3. Coelho, Vitor N. & Weiss Cohen, Miri & Coelho, Igor M. & Liu, Nian & Guimarães, Frederico Gadelha, 2017. "Multi-agent systems applied for energy systems integration: State-of-the-art applications and trends in microgrids," Applied Energy, Elsevier, vol. 187(C), pages 820-832.
    4. Hall, Stephen & Roelich, Katy, 2016. "Business model innovation in electricity supply markets: The role of complex value in the United Kingdom," Energy Policy, Elsevier, vol. 92(C), pages 286-298.
    5. repec:eee:energy:v:161:y:2018:i:c:p:1-9 is not listed on IDEAS
    6. Tunç Durmaz & Aude Pommeret & Ian Ridley, 2017. "Willingness to Pay for Solar Panels and Smart Grids," Working Papers 2017.24, Fondazione Eni Enrico Mattei.
    7. repec:eee:enepol:v:107:y:2017:i:c:p:11-26 is not listed on IDEAS
    8. Prudence Dato & Tun Durmaz & Aude Pommeret, 2017. "Intermittent renewable electricity generation with smart grids," Working Papers 2017.09, FAERE - French Association of Environmental and Resource Economists.
    9. repec:eee:enepol:v:121:y:2018:i:c:p:426-440 is not listed on IDEAS
    10. Zhou, Kaile & Yang, Shanlin & Shao, Zhen, 2016. "Energy Internet: The business perspective," Applied Energy, Elsevier, vol. 178(C), pages 212-222.
    11. Pereira, Guillermo Ivan & Specht, Jan Martin & Silva, Patrícia Pereira & Madlener, Reinhard, 2018. "Technology, business model, and market design adaptation toward smart electricity distribution: Insights for policy making," Energy Policy, Elsevier, vol. 121(C), pages 426-440.
    12. Guta, Dawit & Jara, Jose & Adhikari, Narayan & Qiu, Chen & Gaur, Varun & Mirzabaev, Alisher, 2015. "Decentralized energy in Water-Energy-Food Security Nexus in Developing Countries: Case Studies on Successes and Failures," Discussion Papers 207713, University of Bonn, Center for Development Research (ZEF).
    13. Balta-Ozkan, Nazmiye & Watson, Tom & Mocca, Elisabetta, 2015. "Spatially uneven development and low carbon transitions: Insights from urban and regional planning," Energy Policy, Elsevier, vol. 85(C), pages 500-510.

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    Smart Grids; Political economy; Co-evolution;


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