University of Sussex
Bauknecht,_Dirk.pdf (1.43 MB)

Transforming the Grid: electricity system governance and network integration of distributed generation

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posted on 2023-06-07, 16:14 authored by Dirk Bauknecht
The thesis analyses how the standard model of liberalised electricity markets that was developed to increase the efficiency of electricity supply can deal with new objectives. While the liberalisation literature argues that additional objectives can be incorporated in the market framework through price signals, a large body of literature based on evolutionary economics argues that innovation and systemic transformation require governance mechanisms that complement the price mechanism of the market to overcome the lock-in of the existing system and coordinate innovation processes. The thesis focuses on the integration of distributed generation (DG) into electricity networks. In the standard model the governance of networks is mainly based on incentive regulation by independent regulators. Thus, the main question is how DG can be integrated into this regime and whether and how it needs to evolve. The research question is broken down according to both different governance issues (connection, integration, innovation, transformation) and different governance levels on which they can be addressed. This is analysed from two angles: Firstly, there is a mainly theoretical discussion of network regulation. Various approaches to amending the standard model are discussed. Secondly, this is complemented by country case studies of the UK and Denmark. The conceptual analysis shows how incentive regulation can accommodate the efficient integration of DG as an additional objective. There is also scope for this model to incorporate governance mechanisms that are geared towards infrastructure transformation. The UK case study shows the practical implementation of this approach and corresponding difficulties. As for Denmark – a DG and network transformation pioneer – the standard model plays a marginal role and economic issues are mainly dealt with outside regulation. The same is true for mechanisms beyond economic incentives. The thesis shows the potential of the standard model to pursue new objectives as well as the need to broaden the scope beyond governance based on economic incentives.


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  • SPRU - Science Policy Research Unit Theses

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  • doctoral

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  • dphil


  • eng


University of Sussex

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