Optimal Policies to Promote Efficient Distributed Generation of Electricity

David Brown and David Sappington

No 2016-1, Working Papers from University of Alberta, Department of Economics

Abstract: We analyze the design of policies to promote efficient distributed generation (DG) of electricity. The optimal policy varies with the set of instruments available to the regulator and with the prevailing DG production technology. DG capacity charges often play a valuable role in inducing optimal investment in DG capacity, allowing payments for DG production to induce the optimal production of electricity using non-intermittent DG technologies. Net metering can be optimal in certain settings, but often is not optimal, especially for non-intermittent DG technologies.

Keywords: electricity pricing; distributed generation; regulation (search for similar items in EconPapers)
JEL-codes: D47 L50 L94 Q40 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2016-01-06
New Economics Papers: this item is included in nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Optimal policies to promote efficient distributed generation of electricity (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2016_001

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