Is small beautiful? A framework for assessing decentralised electricity systems

The German Energiewende (energy transition) has increased the degree of decentralisation in the electricity infrastructure. This article proposes a framework for assessing this technological development from an economic perspective as well as a social one. Four infrastructure dimensions are addressed: the grid level, infrastructure location, flexibility, and balancing generation and supply. Firstly, the impact of decentralisation on these dimensions is assessed concerning economic efficiency. The analysis shows that depending on the technological dimension assessed a decentralised electricity infrastructure has the potential to increase or decrease overall system costs. Secondly, the social perspective is operationalised through three forms of participation, namely procedural, democratic representative and financial participation. The analysis highlights the chances to increase participation through increasing technological decentralisation and points towards the important role of the project-initiating actors on the local level who decide whether options for participation are realised and in what manner. The article does not provide a final answer about whether centralised or decentralised electricity systems are preferable. It highlights the range of dimensions that need to be considered when discussing future decentralised electricity scenarios or making policy decisions.