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Locational signals to reduce network investments in smart distribution grids: What works and what not?

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  • Brandstätt, Christine
  • Brunekreeft, Gert
  • Friedrichsen, Nele

Abstract

Locational pricing can reduce the investment needs arising in distribution networks from the transformation towards smart grids with high shares of renewable generation. We analyse different approaches. Locational signals in a general tariff plan for either energy or network pricing require substantial system reform which impedes feasibility. We propose smart contracts with locational elements as hybrid form. System reform is only modest since contractual solutions emerge in smart grids anyhow. The responsibility for tariff setting stays with the network operator. The regulator’s task is limited to incentivizing efficient network investment and allowing network operators maximum flexibility in contract design.

Suggested Citation

  • Brandstätt, Christine & Brunekreeft, Gert & Friedrichsen, Nele, 2011. "Locational signals to reduce network investments in smart distribution grids: What works and what not?," Utilities Policy, Elsevier, vol. 19(4), pages 244-254.
  • Handle: RePEc:eee:juipol:v:19:y:2011:i:4:p:244-254
    DOI: 10.1016/j.jup.2011.07.001
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    References listed on IDEAS

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    8. Shaw, Rita & Attree, Mike & Jackson, Tim, 2010. "Developing electricity distribution networks and their regulation to support sustainable energy," Energy Policy, Elsevier, vol. 38(10), pages 5927-5937, October.
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    Citations

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    Cited by:

    1. Azhar Ul-Haq & Carlo Cecati & Essam A. Al-Ammar, 2016. "Modeling of a Photovoltaic-Powered Electric Vehicle Charging Station with Vehicle-to-Grid Implementation," Energies, MDPI, Open Access Journal, vol. 10(1), pages 1-20, December.
    2. Roques, Fabien & Finon, Dominique, 2017. "Adapting electricity markets to decarbonisation and security of supply objectives: Toward a hybrid regime?," Energy Policy, Elsevier, vol. 105(C), pages 584-596.
    3. Christine Brandstätt & Gert Brunekreeft & Marius Buchmann & Nele Friedrichsen, 2014. "Information Governance in Smart Grids – A Common Information Platform (CIP)," Bremen Energy Working Papers 0018, Bremen Energy Research.
    4. Christine Brandstätt & Gert Brunekreeft & Nele Friedrichsen, 2011. "Improving Investment Coordination in Electricity Networks Through Smart Contracts," Bremen Energy Working Papers 0010, Bremen Energy Research.
    5. repec:eee:jeborg:v:139:y:2017:i:c:p:106-117 is not listed on IDEAS
    6. repec:eee:juipol:v:50:y:2018:i:c:p:13-25 is not listed on IDEAS
    7. repec:eee:appene:v:195:y:2017:i:c:p:382-401 is not listed on IDEAS
    8. Katrin Schmitz & Christoph Weber, 2013. "Does One Design Fit All? On The Transferability Of The PJM Market Design To The German Electricity Market," EWL Working Papers 1302, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Apr 2013.
    9. Bjoern Felten & Jessica Raasch & Christoph Weber, 2017. "Photovoltaics and Heat Pumps - Limitations of Local Pricing Mechanisms," EWL Working Papers 1702, University of Duisburg-Essen, Chair for Management Science and Energy Economics, revised Feb 2017.
    10. Nele Friedrichsen, 2011. "Governing Smart Grids - the Case for an Independent System Operator," Bremen Energy Working Papers 0011, Bremen Energy Research.
    11. Claire Bergaentzlé, 2013. "From smart technology to smart consumers: for better system reliability and improved market efficiency," Post-Print halshs-01011169, HAL.
    12. Nele Friedrichsen, 2015. "Governing smart grids: the case for an independent system operator," European Journal of Law and Economics, Springer, vol. 39(3), pages 553-572, June.

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