Relying on storage or ICT? How to maintain low voltage grids' stability with an increasing feed-in of fluctuating renewable energy sources

Benedikt Römer, Philipp Reichhart, Johann Kranz and Arnold Picot

22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues from International Telecommunications Society (ITS)

Abstract: Since the beginning of the new century our electricity system is changing rapidly. Distributed energy resources, such as wind or solar energies are becoming more and more important. These energies are producing fluctuating electricity, which is fed into low voltage distribution grids. The resulting volatility complicates the exact balancing of demand and supply. These changes can lead to distribution grid instabilities, damages of electronic devices or even power outages and might therefore end in deadweight losses affecting all electricity users. A concept to tackle this challenge is matching demand with supply in real-time, which is known as smart grids. In this study, we focus on two smart grids' key components: decentralized electricity storages and smart meters. The aim of this study is to provide new insights concerning the low diffusion of smart meters and decentralized electricity storages and to examine whether we are facing situations of positive externalities. During our study we conducted eight in-depth expert interviews. Our findings show that the diffusion of smart meters as well as decentralized electricity storages is widely seen as beneficial to society. This study identifies the most important stakeholders and various related private costs and benefits. As private benefits are numerous but widely distributed among distinct players, we argue that we face situations of positive externalities and thus societal desirable actions are omitted. We identify and discuss measures to foster diffusion of the two studied smart grid key components. Surprisingly, we find that direct interventions like subsidies are mostly not seen as appropriate even by experts from industries that would directly benefit from them. As the most important point, we identified well-designed and clearly defined regulatory and legal frameworks that are free of contradictions.

Keywords: smart meter; decentralized electricity storage; smart grid; externality (search for similar items in EconPapers)
JEL-codes: H23 L50 O13 O33 Q21 Q41 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:itse11:52198

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