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Technology, business model, and market design adaptation toward smart electricity distribution: Insights for policy making

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The ongoing European Union sustainable energy transition has a disruptive potential regarding the role of infrastructure and utilities in the electricity sector. The increased spread of digital technologies, renewable energy sources, and prosumers calls for a swift and well-guided adaptation of the electricity distribution industry towards a smart grids context. We analyze the challenges and opportunities associated with this adaptation through nine multi-stakeholder workshops, held in Germany and Portugal in 2016-2017, engaging distribution system operators (DSOs), researchers, academics, and integrated utility companies to obtain up-to-date insights. Our results indicate uncertainty regarding the value of large-scale rollout of smart meters for DSOs. Also, a corporate culture with resistance to change is observed, challenging the integration of novel technologies and processes. Traditional regulation is seen as a barrier to smart grid investments, is associated with job losses, and knowledge destruction. Policy-makers can benefit from these insights by taking them into account in policy design and market restructuring.

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  • Pereira, Guillermo Ivan & Specht, Jan Martin & Pereira da Silva, Patrícia & Madlener, Reinhard, 2018. "Technology, business model, and market design adaptation toward smart electricity distribution: Insights for policy making," FCN Working Papers 3/2018, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
  • Handle: RePEc:ris:fcnwpa:2018_003
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    Cited by:

    1. Lazar Gitelman & Mikhail Kozhevnikov & Olga Ryzhuk, 2019. "Advance Management Education for Power-Engineering and Industry of the Future," Sustainability, MDPI, Open Access Journal, vol. 11(21), pages 1-23, October.
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    3. Sovacool, Benjamin K. & Martiskainen, Mari & Hook, Andrew & Baker, Lucy, 2020. "Beyond cost and carbon: The multidimensional co-benefits of low carbon transitions in Europe," Ecological Economics, Elsevier, vol. 169(C).
    4. Marius Buchmann, 2019. "How decentralization drives a change of the institutional framework on the distribution grid level in the electricity sector – the case of local congestion markets," Bremen Energy Working Papers 0031, Bremen Energy Research.
    5. Siddharth Sareen, 2020. "Social and technical differentiation in smart meter rollout: embedded scalar biases in automating Norwegian and Portuguese energy infrastructure," Palgrave Communications, Palgrave Macmillan, vol. 7(1), pages 1-8, December.
    6. Pereira, Guillermo Ivan & Pereira da Silva, Patrícia & Cerqueira, Pedro André, 2020. "Electricity distribution incumbents' adaptation toward decarbonized and smarter grids: Evidence on the role market, regulatory, investment, and firm-level factors," Energy Policy, Elsevier, vol. 142(C).

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    Keywords

    Electricity distribution; smart grid; technology; business model; market design; policy;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

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