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Toward Real Options Analysis of IS-Enabled Flexibility in Electricity Demand

Title data

Fridgen, Gilbert ; Häfner, Lukas ; König, Christian ; Sachs, Thomas:
Toward Real Options Analysis of IS-Enabled Flexibility in Electricity Demand.
2014
Event: 35th International Conference on Information Systems (ICIS) , 14.-17. Dez. 2014 , Auckland, New Zealand.
(Conference item: Conference , Paper )

Official URL: Volltext

Abstract in another language

As the transition to wind and solar progresses, the integration of renewable energy sources makes electricity production increasingly fluctuating, also causing volatility in electricity prices on energy markets. In order to guarantee power grid stability, utilities need to balance volatile supply through shifting demand. This measure of demand side management creates flexibility, being enabled as the integration of information and communication technology, e.g. smart meters and load control switches, in the power grid grows. The flexibility of deferring consumption to times of lower demand or higher supply bears an economic value which can be quantified by recurring to electricity market prices. Our kernel theory in terms of design science research, real options theory is the appropriate approach for quantification under uncertainty. It provides for the assessment of investment potential in information systems for load control. Addressing the prerequisite, we develop a stochastic process which realistically replicates electricity spot price development. In further research, we will thereby assess the value of IS-enabled flexibility in electricity demand.

Further data

Item Type: Conference item (Paper)
Refereed: Yes
Keywords: demand side management, load shifting, economic value of IS, electricity spot price model, real options
Institutions of the University: Faculties
Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professorship Business Informations Systems and sustainable IT management
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professorship Business Informations Systems and sustainable IT management > Professorship Business Informations Systems and sustainable IT management- Univ.-Prof. Dr. Gilbert Fridgen
Research Institutions
Research Institutions > Research Centres > Forschungszentrum für Modellbildung und Simulation (MODUS)
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Research Institutions > Research Centres
Result of work at the UBT: Yes
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 31 Mar 2015 08:48
Last Modified: 19 Dec 2018 10:26
URI: https://eref.uni-bayreuth.de/id/eprint/7766