Optimal Procurement of Distributed Energy Resources

David Brown and David Sappington

No 2017-5, Working Papers from University of Alberta, Department of Economics

Abstract: We analyze the optimal design of policies to motivate electricity distribution companies to adopt efficient distributed energy resources (DER) and manage associated project costs. The optimal policy often entails a bias against new DER projects and implements considerable cost sharing when DER projects are undertaken in order to limit the utility's rent. Failure to adequately tailor the degree of cost sharing to the prevailing environment can raise procurement costs substantially. It can be optimal to reward a distribution company with more than the cost saving it achieves.

Keywords: distributed energy resources; procurement; regulation (search for similar items in EconPapers)
JEL-codes: L51 L94 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2017-08-03
New Economics Papers: this item is included in nep-ene, nep-ppm and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Optimal Procurement of Distributed Energy Resources (2018)
Journal Article: Optimal Procurement of Distributed Energy Resources (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2017_005

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