A number of the electric power industry’s dimension are rapidly changing including generation, transmission, distribution and, most importantly, in relation to its customers. The fastest and most pronounced transformation is taking place in distributed energy resources or DERs — which include both energy efficiency improvements and distributed generation. The former allows consumers to use less ; the latter allows them to generate more of what they need. Combined, they are turning an increasing number of consumers into prosumers , eroding utility revenues and threatening the historical business model, which has been based on fixed tariffs applied to volumetric consumption. This paper examines the ramifications of these developments and their implications for the power sector.

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