Challenges for Business Development in the Field of Smart Grids

Benedikt Römer (), Philipp Reichhart, Johann J. Kranz () and Arnold Picot
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Benedikt Römer: Center for Digital Technology and Management
Philipp Reichhart: Ludwig-Maximilians-University
Johann J. Kranz: Georg-August-Universität Goettingen

Chapter Chapter 12 in Broadband Networks, Smart Grids and Climate Change, 2013, pp 135-155 from Springer

Abstract: Abstract Smart Grids—communication networks connecting electricity system components—are a promising solution to balance the fluctuating production of renewable energy sources with consumption in low voltage grids. In this respect, electricity storage and smart metering are important technologies. However, due to a lack of working business models, diffusion is low. We analyze the effect of positive externalities on this low diffusion using expert interviews. We identify related stakeholders and their potential costs and benefits from smart grid investments. Our findings provide numerous avenues for business development and strategy definition in the field of smart grids and show that smart meters and decentralized electricity storages are widely seen as beneficial to society. Private benefits are numerous but widely distributed among distinct players. Thus, we argue that investments desired by society are omitted due to positive externalities. In addition, we identify and discuss measures to foster diffusion of the two studied smart grid key components. In this analysis, we find that even experts from industries directly benefiting from direct interventions argue against subsidies as being not suitable for accelerating the implementation of smart grids. Instead, they prefer clearly defined and well-designed regulatory and legal frameworks, which are free of contradictions.

Keywords: Smart Grid; Positive Externality; Private Benefit; Private Cost; Telecommunication Company (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-1-4614-5266-9_12

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DOI: 10.1007/978-1-4614-5266-9_12

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