Incentive Regulation and Network Innovations

Dierk Bauknecht

No 2011/02, RSCAS Working Papers from European University Institute

Abstract: Smart Grids require innovations in the electricity networks, mainly on the level of the distributed system operator (DSO). A main objective is to increase the share of distributed generation (DG) connected to that network level, but also to enable load management on the demand side. This paper analyses network innovations in the context of the regulatory framework, namely incentive regulation. It is structured as follows: The first section examines how cost-based and price-based regulatory schemes influence RD&D by regulated companies. This is followed by a discussion of various regulatory instruments to stimulate innovation. The third section provides a more general discussion of the pros and cons of promoting network innovations via network regulation.

Keywords: incentive regulation; price-based regulation; cost-based regulation; Rd&D; network innovations (search for similar items in EconPapers)
Date: 2011-02-22
New Economics Papers: this item is included in nep-ene, nep-ino, nep-net and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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