Econonomics of Energy and Environmental Policy

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Who Knows What: Information Barriers to Efficient DER Roll-out in the U.S.

Distributed Energy Resources (DERs) are increasingly popular. Their relevance to the functioning of energy systems and emissions reduction has spurred a flurry of policy discussions and research into the measures needed to facilitate integration of these resources. However, the majority of that work focuses on systems characterized by complete and perfect information, while in reality, there are multiple information barriers to efficient DER roll-out. In this paper, we study the prevalence and relevance of information issues arising in DER deployment in the U.S. We do that by analyzing DER-related regulatory proceedings, surveying the relevant electricity sector stakeholders, and reviewing the existing engineering and economic literature on distributed resources. Within the range of identified issues, most of which relate to utilities, we analyze four issues in greater detail: consumer information, interconnection information, the value of non-wire alternatives, and DER remuneration. We then outline some of the policies necessary to ensure efficient DER roll-out.
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Keywords: Distributed energy resources, information, regulation

DOI: 10.5547/2160-5890.12.1.sbia

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Published in Volume 12, Number 1 of The Quarterly Journal of the IAEE's Energy Economics Education Foundation.


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