TY - JOUR TI - The impact of regulation on a firm's incentives to invest in emergent smart grid technologies T2 - Energy Journal VL - 38 IS - 2 AU - Costa, P. M. AU - Bento, N. AU - Marques, V. PY - 2017 SP - 149-174 SN - 0195-6574 DO - 10.5547/01956574.38.2.pcos UR - https://www.iaee.org/en/publications/ejarticle.aspx?id=2881 AB - This paper analyzes the implementation of new technologies in network industries through the development of a suitable regulatory scheme. The analysis focuses on Smart Grid (SG) technologies which, among others benefits, could save operational costs and reduce the need for further conventional investments in the grid. In spite of the benefits that may result from their implementation, the adoption of SGs by network operators can be hampered by the uncertainties surrounding actual performances. A decision model has been developed to assess the firms' incentives to invest in "smart" technologies under different regulatory schemes. The model also enables testing the impact of uncertainties on the reduction of operational costs, and of conventional investments. Under certain circumstances, it may be justified to support the development and early deployment of emerging innovations that have a high potential to ameliorate the efficiency of the electricity system, but whose adoption faces many uncertainties. ER -