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Challenges for Business Development in the Field of Smart Grids

In: Broadband Networks, Smart Grids and Climate Change

Author

Listed:
  • Benedikt Römer

    (Center for Digital Technology and Management)

  • Philipp Reichhart

    (Ludwig-Maximilians-University)

  • Johann J. Kranz

    (Georg-August-Universität Goettingen)

  • Arnold Picot

    (Ludwig-Maximilians-University)

Abstract

Smart Grids—communication networks connecting electricity system components—are a promising solution to balance the fluctuating production of renewable energy sources with consumption in low voltage grids. In this respect, electricity storage and smart metering are important technologies. However, due to a lack of working business models, diffusion is low. We analyze the effect of positive externalities on this low diffusion using expert interviews. We identify related stakeholders and their potential costs and benefits from smart grid investments. Our findings provide numerous avenues for business development and strategy definition in the field of smart grids and show that smart meters and decentralized electricity storages are widely seen as beneficial to society. Private benefits are numerous but widely distributed among distinct players. Thus, we argue that investments desired by society are omitted due to positive externalities. In addition, we identify and discuss measures to foster diffusion of the two studied smart grid key components. In this analysis, we find that even experts from industries directly benefiting from direct interventions argue against subsidies as being not suitable for accelerating the implementation of smart grids. Instead, they prefer clearly defined and well-designed regulatory and legal frameworks, which are free of contradictions.

Suggested Citation

  • Benedikt Römer & Philipp Reichhart & Johann J. Kranz & Arnold Picot, 2013. "Challenges for Business Development in the Field of Smart Grids," Springer Books, in: Eli M. Noam & Lorenzo Maria Pupillo & Johann J. Kranz (ed.), Broadband Networks, Smart Grids and Climate Change, edition 127, chapter 0, pages 135-155, Springer.
  • Handle: RePEc:spr:sprchp:978-1-4614-5266-9_12
    DOI: 10.1007/978-1-4614-5266-9_12
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