Sustainable Smart Grids, Emergence of a Policy Framework

Chapter

Abstract

A smart grid is an electricity network that can (1) cost-efficiently integrate a diverse set of generators, (2) enable consumers to play an active role in managing the demand for electricity, and (3) operate at high levels of power quality and system security. Policies to promote smart grids include net metering tariffs and time-of-use pricing; interconnection and technology standards; subsidies, targets and goals; customer privacy protection laws; and rules governing the ownership of renewable energy credits

Glossary

Cost-benefit analysis

Cost-benefit analysis is an economic approach to policy evaluation. It measures the timeline of expected costs and benefits associated with policy implementation, discounting future values to produce a net present value. Cost-benefit ratios are also used to evaluate a policy relative to the status quo or an alternative policy formulation.

Demand response

Demand response is a means of reducing customer consumption of electricity in response to supply conditions. It is different from energy efficiency, which involves using less electricity to perform a particular task.

Distributed generation

Distributed generation involves the production of electricity from many small energy sources (including, for instance, natural gas turbines and solar photovoltaic panels). It is distinct from the prevailing generation of electricity at large centralized facilities.

Feed-in tariffs

Feed-in tariffs provide incentives for the generation of renewable electricity. Governments and utilities provide guaranteed purchase contracts for electricity generated from renewables; the particular tariffs may change over time to track the development of technology and cost reduction.

Natural monopoly

Natural monopolies occur when economies of scale reduce production costs, such that one firm can produce at lower costs than multiple firms. Many public goods are typically provided by natural monopolies, such as electricity, railway, and water.

Public good

A public good is a good that is non-excludable and non-rivalrous. It is costly to keep nonpayers from enjoying a public good, and one’s consumption of a public good does not affect another’s ability to consume the good. Natural defense and clean air are two examples of public goods.

Renewable electricity standard

Renewable electricity standard is a policy target that sets minimum requirement for electricity generated from renewable energy sources.

Renewable energy certificates

Renewable energy certificates are tradable energy commodities. One certificate often represents one megawatt-hour of electricity generated from renewable energy.

Time-of-use pricing

Time-of-use pricing refers to electricity prices, which change based on time of consumption, such as peak and off-peak periods.

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Books and Reviews

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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.School of Public PolicyGeorgia Institute of TechnologyAtlantaUSA

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