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Business and policy models to incentivise utilities to engage with demand-side management

Warren, P; (2019) Business and policy models to incentivise utilities to engage with demand-side management. Green Finance , 1 (1) pp. 4-29. 10.3934/gf.2019.1.4. Green open access

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Abstract

Business and policy models to incentivise utilities to engage with demand-side management (DSM) have received more attention in the grey literature than the academic literature. This review paper contributes to filling this gap by reviewing theoretical frameworks for four key categories of business models and how they relate to policy models that enable their implementation. The paper proposes a theoretical lens through which to visualise the different frameworks. The review discusses the key benefits and challenges for utilities to engage with DSM, and finds that deferred investment in new generation capacity, new business opportunities and services, and dealing with variable power production are the primary benefits, and limited incentives to invest in markets based on the quantity of energy sold and cost recovery issues (such as DSM programme costs) are the main challenges. The paper reviews four primary business and policy models: decoupling, demand-side participation in capacity markets, utility obligations and Energy Service Companies (ESCOs), and finds that despite the limitations of the evidence base on the applicability of decoupling in fully liberalised markets, demand-side participation in capacity markets, utility obligations and ESCOs appear to be applicable across contexts.

Type: Article
Title: Business and policy models to incentivise utilities to engage with demand-side management
Open access status: An open access version is available from UCL Discovery
DOI: 10.3934/gf.2019.1.4
Publisher version: https://doi.org/10.3934/gf.2019.1.4
Language: English
Additional information: Copyright © 2019 the Author(s), licensee AIMS Press. This is an open access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0)
Keywords: demand-side management; decoupling; capacity markets; utility obligations; ESCOs; energy efficiency
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Political Science
URI: https://discovery.ucl.ac.uk/id/eprint/10091208
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