The Economics of the Smart Grid

descriptionPublicationkeyboard_double_arrow_right Article , Conference object , Other literature type , Research 01 Sep 2011 English Publisher:Elsevier BVJournal:SSRN Electronic Journal (eissn: 1556-5068,

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Authors: Luciano De Castro; Joisa Dutra;

doi: 10.2139/ssrn.2006761 , 10.1109/allerton.2011.6120317

handle: 10419/59614

The Economics of the Smart Grid

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Abstract

Smart Grid (SG) technologies may bring substantial advantages to society, but the required investments are also sizable. This paper establishes a framework for examining the issues related to the SG, and highlights some of the difficulties in establishing a mechanism for paying SG costs. In particular, we show that generators will lose profits as a direct effect of demand response initiatives, and most of the benefits of SG cannot be easily converted into payments.

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