Transforming the Grid: Electricity System Governance and Network Integration of Distributed Generation

The transformation of electricity systems requires new networks. However, network regulation has mainly been aimed at cost reduction of existing networks via incentive regulation. This book analyzes if and how network regulation can accommodate these new challenges. Transforming the Grid takes the network integration of distributed generation (DG) as an example and examines the cases of the United Kingdom and Denmark. The research is broken down according to different governance issues: DG connection and integration, network innovation, and transformation. The liberalization literature holds that additional objectives can be incorporated in the market and regulation framework through price signals. However, 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. Against this general background, the book shows the potential of the standard model of regulation to pursue new objectives, as well as the need to broaden the scope beyond governance based on economic incentives. (Series: Competition and Regulation of Markets and Companies / Wettbewerb und Regulierung von Markten und Unternehmen - Vol. 20)