An Application of Soft Systems Methodology in the Evaluation of Policies and Incentive Actions to Promote Technological Innovations in the Electricity Sector

The promotion of a reliable and sustainable power system has as key drivers the development of smart grids associated with demand-side management schemes, diffusion of electric mobility, integration of larger shares of distributed (micro)generation, and the introduction of storage systems. In addition, these technological developments represent new business opportunities for several players, which should be considered by regulatory guidelines accounting for technical efficiency, economic feasibility and tariff affordability. The technical and economic characteristics of the electricity sector do not induce that the process of technological innovation happens in an endogenous manner within the sector dynamics. Therefore, public policies have a role to play in this process. This work presents an approach using Problem Structuring Methods to frame the problem of analyzing and evaluating technological innovations and associate incentive policies in the electricity sector. The results of this structuring phase using Soft Systems Methodology under different perspectives suggest a large number of issues to be taken into account that were organized as a hierarchy of objectives. These objectives correspond to the criteria of a multicriteria decision analysis model to assess policies promoting technological innovations. This methodology provides decision support to decision makers to shape policies aimed at fostering more reliable and sustainable electricity systems.