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PROMOTING INNOVATION IN THE ELECTRICITY INDUSTRY
Author(s) -
Kiesling L. Lynne
Publication year - 2010
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/j.1468-0270.2010.02000.x
Subject(s) - electricity , volatility (finance) , industrial organization , economics , electricity market , supply and demand , mains electricity , business , value (mathematics) , electricity retailing , commerce , natural resource economics , microeconomics , engineering , finance , voltage , machine learning , computer science , electrical engineering
Smart metering can bring significant benefits to electricity markets by allowing customers to reduce demand or increase supply when generation capacity is temporarily scarce. To reap the full efficiency and environmental benefits of this technology, regulators must allow price volatility and free entry into the market. The efficiency gains are enormous as both demand and supply will be affected by both temporary and longer‐lasting price changes. Experiments have shown the value of this approach.