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Resilience regulation: An incentive scheme for regulated electricity network operators to improve resilience

Author

Listed:
  • Gert Brunekreeft
  • Marius Buchmann
  • Martin Palovic
  • Anna Pechan

Abstract

This paper presents an approach for resilience incentives in the regulation of electricity network operators. Resilience is the ability of the power system to deal quickly and efficiently with large-scale and long-lasting power interruptions. It comprises two related aspects: minimizing the damage caused by an outage and increasing the robustness of the system. The resilience regulation proposed in this paper contains two complementary parts. First, a resilience incentive mechanism, which aims at internalizing external effects of resilience improvement. This part relies on so-called duration-dependent consumer damage functions (CDFs). Second, a forward-looking budget approach with a sharing factor to strengthen incentives for resilience expenses within regulatory constraints.

Suggested Citation

  • Gert Brunekreeft & Marius Buchmann & Martin Palovic & Anna Pechan, "undated". "Resilience regulation: An incentive scheme for regulated electricity network operators to improve resilience," Bremen Energy Working Papers 0044, Bremen Energy Research.
    • Handle: RePEc:bei:00bewp:0044
    as

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    File URL: https://bremen-energy-research.de/wp-content/bewp/bewp44.pdf
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    References listed on IDEAS

    as
    1. Gert Brunekreeft, Marius Buchmann, and Roland Meyer, 2016. "The Rise of Third Parties and the Fall of Incumbents Driven by Large-Scale Integration of Renewable Energies: The Case of Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Bollino-M).
    2. Gert Brunekreeft & Marius Buchmann & Roland Meyer, 2016. "The Rise of Third Parties and the Fall of Incumbents Driven by Large-Scale Integration of Renewable Energies: The Case of Germany," Bremen Energy Working Papers 0024, Bremen Energy Research.
    3. Kate Anderson & Nicholas D. Laws & Spencer Marr & Lars Lisell & Tony Jimenez & Tria Case & Xiangkun Li & Dag Lohmann & Dylan Cutler, 2018. "Quantifying and Monetizing Renewable Energy Resiliency," Sustainability, MDPI, vol. 10(4), pages 1-13, March.
    4. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn.
    5. de Nooij, Michiel & Koopmans, Carl & Bijvoet, Carlijn, 2007. "The value of supply security: The costs of power interruptions: Economic input for damage reduction and investment in networks," Energy Economics, Elsevier, vol. 29(2), pages 277-295, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    resilience; electricity; network; regulation;
    All these keywords.

    JEL classification:

    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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