Consumer ownership, natural monopolies and transition to 100% Renewable Energy Systems

Abstract In a transition to 100% renewable energy, public regulation has to deal with, among other issues, price efficiency, security of supply, and the transition from sector based fossil fuel systems to sector integrated smart energy systems based on energy conservation and renewable energy. Most studies and practical policies only focus on building “green incentives” into the money flows. There is less research focus on the importance of citizen and consumer ownership models in the green energy transition process. This is problematic, as different ownership models have different influences on price efficiency as well as the ability of the smart energy system to integrate large amounts of fluctuating energy. The purpose of this paper is to analyze citizen and consumer ownership models both with regard to their influence on consumer prices and their capability to handle the multitude of coordination tasks in a transition from sector based to integrated smart energy systems. A consumer ownership model has positive potentials both in terms of maintaining low energy prices and securing low coordination transaction costs in smart energy systems. The realization of these positive potentials is dependent on the concrete institutional context and public regulation in which a given ownership construction is embedded.