Optimal Procurement of Distributed Energy Resources

David Brown and David Sappington

The Energy Journal, 2018, vol. 39, issue 5, 131-156

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 cost sharing when DER projects are undertaken in order to foster cost containment while limiting excessive profit for the utility. Failure to adequately tailor the degree of cost sharing to the prevailing environment can raise procurement costs substantially. The distribution company may optimally be awarded more than the cost saving it achieves.

Keywords: Distributed Energy Resources; Procurement; Regulation (search for similar items in EconPapers)
Date: 2018
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Journal Article: Optimal Procurement of Distributed Energy Resources (2018)
Working Paper: Optimal Procurement of Distributed Energy Resources (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:39:y:2018:i:5:p:131-156

DOI: 10.5547/01956574.39.5.dbro

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