Munich Personal RePEc Archive

Utility 2.0: A multi-dimensional review of New York’s Reforming the Energy Vision (REV) and Great Britain’s RIIO utility business models

Brocks, Annette and Nyangon, Joseph and Taminiau, Job (2016): Utility 2.0: A multi-dimensional review of New York’s Reforming the Energy Vision (REV) and Great Britain’s RIIO utility business models. Published in: SSRN Electronic Journal (30 September 2016): pp. 1-39.

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Abstract

A powerful confluence of architectural, technological, and socio-economic forces is transforming the U.S. electricity market. These trends and developments are placing tremendous pressure on utilities triggering changes in electricity production, transmission, and consumption. Increased democratized choice over energy usage, for instance, is empowering consumers to take key actions such as peak shaving, flexible loading, and installation of grid automation and intelligence solutions. A key step to achieving full benefits of these programs is repurposed Utility 2.0 concepts: the distributed grid, innovations in electric market design, real-time automated monitoring and verification, deployment of microgrids, increased uptake of ‘smart meters and smarter’ grids, and investment in data analytics in order to incentivize efficient market design and flexibility. Using a seven-part multi-dimensional framework, this paper examines the role of infrastructure network, revenue models, customer interface, business model resilience, organizational logic and mandate, risk management, and value proposition in improving communication with consumers and operational boundary of utilities in the new utility business model regime. The paper also assesses two prominent utility business models, the New York’s Reforming the Energy Vision (REV) and Great Britain’s ‘Revenue = Incentives + Innovation + Outputs” (RIIO) legislation in order to illustrate potential changes that await the energy utility actors. We conclude that positioning the ‘business model’ as the unit for analysis provides a robust and multi-dimensional tool for evaluating the suitability of new proposals for electric utilities and energy governance.

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