Smart-Grid Investments, Regulation and Organization

Per J. Agrell, Peter Bogetoft

Publikation: Working paperForskning

Resumé

Worldwide, but in particular in North America and Europe, the grid infrastructure managers are facing demands for reinvestments in new assets with higher on-grid and off-grid functionality in order to promote energy efficiency and low-carbon conversion of the energy sector. To meet societal policy objectives in terms of carbon dioxide emissions, both the composition of the generators in favor of distributed energy resources (DER) and the load, promoting integration
with downstream energy useage, will change. In this paper, we chararcterize some of the effects of new asset investments policy on the network tasks, assets and costs and contrast this with the assumptions implicit or explicit in current economic network regulation. The resulting challenge is identified as the change in the direction of higher asymmetry of information and higher capital intensity, combined with ambiguities in terms of task separation. To provide guidance, we present a model of investment provision under regulation between a distribution system operator (DSO) and a potential investor-generation. The results from the model confirm the hypothesis thatnetwork regulation should find a focal point, should integrate externalities in the performanceassessment and should avoid wide delegation of contracting-billing for smart-grid investments.
OriginalsprogEngelsk
Udgivelses stedLouvain-la-Neuve
UdgiverUniversite Catholique de Louvain
Antal sider43
StatusUdgivet - 2011
NavnCORE Discussion Paper
Nummer2011/72

Bibliografisk note

Udgivet under Center for Operations and Econometrics på universitetet

Emneord

  • Regulation
  • Energy
  • Networks
  • Investments

Citer dette

Agrell, P. J., & Bogetoft, P. (2011). Smart-Grid Investments, Regulation and Organization. Louvain-la-Neuve: Universite Catholique de Louvain. CORE Discussion Paper, Nr. 2011/72
Agrell, Per J. ; Bogetoft, Peter. / Smart-Grid Investments, Regulation and Organization. Louvain-la-Neuve : Universite Catholique de Louvain, 2011. (CORE Discussion Paper; Nr. 2011/72).
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Agrell, PJ & Bogetoft, P 2011 'Smart-Grid Investments, Regulation and Organization' Universite Catholique de Louvain, Louvain-la-Neuve.

Smart-Grid Investments, Regulation and Organization. / Agrell, Per J.; Bogetoft, Peter.

Louvain-la-Neuve : Universite Catholique de Louvain, 2011.

Publikation: Working paperForskning

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N2 - Worldwide, but in particular in North America and Europe, the grid infrastructure managers are facing demands for reinvestments in new assets with higher on-grid and off-grid functionality in order to promote energy efficiency and low-carbon conversion of the energy sector. To meet societal policy objectives in terms of carbon dioxide emissions, both the composition of the generators in favor of distributed energy resources (DER) and the load, promoting integrationwith downstream energy useage, will change. In this paper, we chararcterize some of the effects of new asset investments policy on the network tasks, assets and costs and contrast this with the assumptions implicit or explicit in current economic network regulation. The resulting challenge is identified as the change in the direction of higher asymmetry of information and higher capital intensity, combined with ambiguities in terms of task separation. To provide guidance, we present a model of investment provision under regulation between a distribution system operator (DSO) and a potential investor-generation. The results from the model confirm the hypothesis thatnetwork regulation should find a focal point, should integrate externalities in the performanceassessment and should avoid wide delegation of contracting-billing for smart-grid investments.

AB - Worldwide, but in particular in North America and Europe, the grid infrastructure managers are facing demands for reinvestments in new assets with higher on-grid and off-grid functionality in order to promote energy efficiency and low-carbon conversion of the energy sector. To meet societal policy objectives in terms of carbon dioxide emissions, both the composition of the generators in favor of distributed energy resources (DER) and the load, promoting integrationwith downstream energy useage, will change. In this paper, we chararcterize some of the effects of new asset investments policy on the network tasks, assets and costs and contrast this with the assumptions implicit or explicit in current economic network regulation. The resulting challenge is identified as the change in the direction of higher asymmetry of information and higher capital intensity, combined with ambiguities in terms of task separation. To provide guidance, we present a model of investment provision under regulation between a distribution system operator (DSO) and a potential investor-generation. The results from the model confirm the hypothesis thatnetwork regulation should find a focal point, should integrate externalities in the performanceassessment and should avoid wide delegation of contracting-billing for smart-grid investments.

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Agrell PJ, Bogetoft P. Smart-Grid Investments, Regulation and Organization. Louvain-la-Neuve: Universite Catholique de Louvain. 2011.