Resilience regulation: An incentive scheme for regulated electricity network operators to improve resilience

Gert Brunekreeft, Marius Buchmann, Martin Palovic and Anna Pechan

No 44, Bremen Energy Working Papers from Bremen Energy Research

Abstract: This paper presents an approach for resilience incentives in the regulation of electricity network operators. Resilience is the ability of the power system to deal quickly and efficiently with large-scale and long-lasting power interruptions. It comprises two related aspects: minimizing the damage caused by an outage and increasing the robustness of the system. The resilience regulation proposed in this paper contains two complementary parts. First, a resilience incentive mechanism, which aims at internalizing external effects of resilience improvement. This part relies on so-called duration-dependent consumer damage functions (CDFs). Second, a forward-looking budget approach with a sharing factor to strengthen incentives for resilience expenses within regulatory constraints.

Keywords: resilience; electricity; network; regulation (search for similar items in EconPapers)
JEL-codes: K23 L5 L94 (search for similar items in EconPapers)
Pages: 22 pages
New Economics Papers: this item is included in nep-ene and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bei:00bewp:0044

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