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Utility 2.0: A multi-dimensional review of New York’s Reforming the Energy Vision (REV) and Great Britain’s RIIO utility business models

Author

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  • Brocks, Annette
  • Nyangon, Joseph
  • Taminiau, Job

Abstract

A powerful confluence of architectural, technological, and socio-economic forces is transforming the U.S. electricity market. These trends and developments are placing tremendous pressure on utilities triggering changes in electricity production, transmission, and consumption. Increased democratized choice over energy usage, for instance, is empowering consumers to take key actions such as peak shaving, flexible loading, and installation of grid automation and intelligence solutions. A key step to achieving full benefits of these programs is repurposed Utility 2.0 concepts: the distributed grid, innovations in electric market design, real-time automated monitoring and verification, deployment of microgrids, increased uptake of ‘smart meters and smarter’ grids, and investment in data analytics in order to incentivize efficient market design and flexibility. Using a seven-part multi-dimensional framework, this paper examines the role of infrastructure network, revenue models, customer interface, business model resilience, organizational logic and mandate, risk management, and value proposition in improving communication with consumers and operational boundary of utilities in the new utility business model regime. The paper also assesses two prominent utility business models, the New York’s Reforming the Energy Vision (REV) and Great Britain’s ‘Revenue = Incentives + Innovation + Outputs” (RIIO) legislation in order to illustrate potential changes that await the energy utility actors. We conclude that positioning the ‘business model’ as the unit for analysis provides a robust and multi-dimensional tool for evaluating the suitability of new proposals for electric utilities and energy governance.

Suggested Citation

  • Brocks, Annette & Nyangon, Joseph & Taminiau, Job, 2016. "Utility 2.0: A multi-dimensional review of New York’s Reforming the Energy Vision (REV) and Great Britain’s RIIO utility business models," MPRA Paper 91489, University Library of Munich, Germany, revised 30 Sep 2016.
  • Handle: RePEc:pra:mprapa:91489
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    File URL: https://mpra.ub.uni-muenchen.de/91489/1/MPRA_paper_91489.pdf
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    References listed on IDEAS

    as
    1. Joseph Nyangon & John Byrne & Job Taminiau, 2017. "An assessment of price convergence between natural gas and solar photovoltaic in the U.S. electricity market," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 6(3), May.
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    6. Sanya Carley, 2012. "Energy demand‐side management: New perspectives for a new era," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 31(1), pages 6-32, December.
    7. Steinberger, Julia K. & van Niel, Johan & Bourg, Dominique, 2009. "Profiting from negawatts: Reducing absolute consumption and emissions through a performance-based energy economy," Energy Policy, Elsevier, vol. 37(1), pages 361-370, January.
    8. Hannon, Matthew J. & Foxon, Timothy J. & Gale, William F., 2013. "The co-evolutionary relationship between Energy Service Companies and the UK energy system: Implications for a low-carbon transition," Energy Policy, Elsevier, vol. 61(C), pages 1031-1045.
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    More about this item

    Keywords

    Utility 2.0; Utility business model; Multi-dimensional analysis; Reforming the Energy Vision; RIIO;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • Q21 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Demand and Supply; Prices
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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