From vertical to horizontal unbundling: A downstream electricity reliability insurance business model

Distribution Networks Tariff Design in the Era of Decentralization: A Business Model Approach

“…Distribution network firms would be paid to ensure reliable supply to 'prosumers' (consumers who also generate electricity and sell it back to the grid) when their own generation is too low, or their consumption is too high. Fuentes et al (2019) provide a microeconomic framework for a reliability insurance business model of electricity, an intangible service in the power sector. The intangible service is "risk," the repackaging of the service is an insurance contract, and the price formation is found through the interaction between demand for and the supply of this product.…”

The “iPhone effect”: The impact of dual technological disruptions on electrification

“…Subscriptions would also afford providers with greater visibility of demand and data generation that could be used to optimize capacity utilization. Using these subscriptions, households could opt for whichever transportation and electricity features they preferred (see Fuentes et al, 2019). The price for these packaged services would be revealed by the buyer’s willingness to have access to these services, decoupling it from the cost of production.…”

“…Or instead of buying electricity as a commodity, consumers could purchase a product differentiated by its intangible attributes, such as “clean” or “reliable” (Fuentes, 2016). Or firms could provide services to help customers satisfy the residual demand not met by their home systems (Fuentes, Blazquez, & Adjali, 2019). In the transportation sector, new technologies challenge the dominant solo car ownership model in favor of a new model of “mobility as service,” which forgoes the acquisition of the asset, the car, instead of buying the service it provides directly (Cowen, 2018; Fulton, Mason, & Meroux, 2017).…”

Energy Economics: The Insurance Effect of Distributed Energy Resources Under System Reliability

“…The uncertainty is due to the intermittent nature, such as weather conditions and time of day, of power generation from renewable energy resources. The inability of DERs to maintain a steady and reliable energy supply also keeps households dependent on the network and lowers their welfare in the event that the DER is unable to generate power as expected [5].…”