Values in the Smart Grid: The co-evolving political economy of smart distribution

Investing in smart grid infrastructure is a key enabler for the transition to low carbon energy systems. Recent work has characterised the costs and benefits of individual “smart” investments. The political economy of the UK electricity system, however, has co-evolved such that there is a mismatch between where benefits accrue and where costs are incurred, leading to a problem of value capture and redeployment. Further, some benefits of smart grids are less easy to price directly and can be classified as public goods, such as energy security and decarbonisation. This paper builds on systemic treatments of energy system transitions to characterise the co-evolution of value capture and structural incentives in the electricity distribution system, drawing on semi-structured interviews and focus groups undertaken with smart grid stakeholders in the UK. This leads to an identification of municipal scale values that may be important for business models for the delivery of smart infrastructure. Municipalities may thus pursue specific economic opportunities through smart grid investment. This supports recent practical interest in an expanded role for municipalities as partners and investors in smart grid infrastructures. •Smart grid investments can benefit municipal economic development.•Drawing on urban political economy we describe these values.•New values alter the smart grid investment problem.•New integration of urban policy and DNOs are proposed by this research.•Socio-technical approaches are enhanced by urban political economy and vice versa.