Onsite Backup Generation and Interruption Insurance for Electricity Distribution

نویسندگان

  • Joseph A. Doucet
  • Shmuel S. Oren
چکیده

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact [email protected].. International Association for Energy Economics is collaborating with JSTOR to digitize, preserve and extend access to The Energy Journal. This paper extends recent work on interruption insurance for electric power by introducing onsite backup generation capacity as a supplementary form of interruption insurance. The basic model of interruption insurance as a mechanism for differential pricing is reviewed the incentive for providing onsite backup generation capacity is demonstrated and the interaction between onsite backup generation and interruption insurance is analyzed. Two types of onsite backup, customer and utility owned , are discussed. It is shown that individuals 9 economic incentives to install onsite backup generation dominate the utility's incentive. Hence customer owned onsite backup decisions will preempt the utility's plan to mitigate compensation payments by providing onsite backup generation.

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تاریخ انتشار 2012