Decentralised and centralised energy: a property rights analysis

Interconnection between centralised and decentralised electrical power sources remains a contentious issue on technical, economic, and policy grounds. This paper considers the problem of interconnection as a property rights problem one that involves allocation conflicts and pressures for institutional change. We argue that the current policy approach to interconnection problems between distributed-generation power sources and the distribution grid in California should take more careful account of changing property rights characteristics of the distribution grid. We review two emerging property rights frameworks community choice aggregation and public power cooperatives/municipalities, which may help overcome such interconnection barriers.