Lesson 11.7 Decentralized Power: The Future Of Real Consumer Power

Decentralization is independence and brings more control immediately into the hands of consumers.  Farmers markets are a decentralized method for food distribution. It unbinds us of the traditional methods of sustainability.  This is what decentralization is all about.  Taking control and thumbing your nose, so to speak, at utilities and the powers that be.  I think the greatest benefit of decentralization is independence and user control. Those participating in a micro grid can in theory, establish their own rates. The dynamic distribution system outlined in the Wisconsin Energy Institute paper seems the most feasible. “Benefits of a dynamic distribution system can include improved reliability, lower power losses, increased use of renewable energy sources, and lower total cost-per kWh.”(1)  Additionally, power needs can be determined locally. “By allowing the customer or micro grid operator to manage itself according to its needs, and then acting as an aggregated single entity to the distribution system operator allows for a number of innovations and custom operations; the interconnect point only needs to know whether power needs to be sent into the micro grid or whether power is flowing out.”(2)

I think it is important to mention Enron.  One of the downsides of deregulation, according to the lesson, was the debacle at Enron. The fault didn’t lay in deregulation.  Rather, it was corrupt management.  Deregulation set up the circumstances that allowed Enron to manipulate grids.  First buying power stocks at lower rates, shutting off grids, driving the stock values of power upward and then cashing in.  This is not evolution or cooperation.  Its crime.

Decentralization in its current forms cannot be avoided and utilities will cooperate in order to survive .  Utilities must recognize emerging consumer controlled power options such as the micro grid.  Additionally, micro grids without individual battery backup cannot truly be independent of utilities. A bipartisan existence must exit. “Most micro grids of the future won’t be making and storing enough power to be grid-independent all of the time. Instead, micro grids will maintain a constant and complex relationship with the utility” (3) As the article implies, utilities will be evolving with local micro grids to provide power during low light and no light scenarios.  Evolution has been slow in the United States.  However, decentralized power generation could save millions in capital investment, reduce power costs, reduce vulnerabilities, and cut greenhouse gas emissions in half.  In regulated power markets competition is nonexistent. However, in a decentralized market, competitive pressure should demand efficiency in the industry and increase profits while simultaneously saving households and businesses utility costs.  Decentralization also introduces new business opportunities.

Decentralized utility needs management.  The local grid needs to have an administration to handle the shared costs such as maintenance.  Third party facilitators could be hired to handle this and a local board of trustees could be hired from a pool of users who are stakeholders.  As for myself, I have already participated in solar array installs all over central California.  To be able to participate in furthering this technology and movement, either as a business owner or involved in a limited partnership, seems exciting.  There will be different and more complex challenges involved in micro grid installs and during its evolution business owners must be ready to adjust.  The lean business plan might do well in this environment.


(1)Beihoff, Bruce, Tom Jahns, Robert Lasseter, and Gary Radloff. “Transforming the Grid from the Distribution System Out.” Transforming the Grid from the Distribution System Out.The Potential for Dynamic Distribution Systems to Create a New Energy Marketplace (n.d.): n. pag. Https://energy.wisc.edu. University of Wisconsin – Madison, July 2014. Web. 7 Nov. 2014. <https://energy.wisc.edu/sites/default/files/Transforming-the-Grid-from-the-Distribution-System-Out.pdf>.

(2)Villarreal,  Christopher, and David Erickson. “Microgrids: A Regulatory Perspective.” Microgrids: A Regulatory (n.d.): n. pag. Microgrids: A Regulatory Perspective. California Public Utilities Commission, 14 Apr. 2014. Web. 7 Nov. 2014. <http://www.cpuc.ca.gov/NR/rdonlyres/01ECA296-5E7F-4C23-8570-1EFF2DC0F278/0/PPDMicrogridPaper414.pdf>.

(3)StJohn, Jeff. “Microgrids: Utility vs. Private Ownership.” Gigaom. Gigaom Research, 24 Feb. 2010. Web. 07 Nov. 2014. <https://gigaom.com/2010/02/24/microgrids-utility-vs-private-ownership/>.

2 thoughts on “Lesson 11.7 Decentralized Power: The Future Of Real Consumer Power

  1. Hello David,
    Thank you for sharing your well-thought-out discussion post, I really enjoyed reading it. First, I liked how you mentioned the good and the bad with deregulation. The Enron case should not go unforgotten and should be studied to assure that it will not happen again in any form or fashion! It is absolutely a crime and I feel that should have faced more severe consequences. You also stated that the utilities will need to have bipartisan approach and must cooperate to survive. This couldn’t be stated better for although the level of competition will increase, all parties must collaborate as one to be the most efficient. I also like your business idea and I agree that this may be a good lean start-up business project. Although, grid maintenance would require a sound plan, it could be altered to appeal to all parties. Thank you for sharing your opinions on the issues of decentralization.
    Katie Loyd

  2. Hello David,
    I enjoyed reading your post. Especially the bit about comparing decentralized electricity to decentralized food production, farmers markets. I’ve never thought about it that way and it helped me to think about decentralization in a new way. You spoke of competition in your post. Do you think competition is an almost immediate occurrence in a new market or does that take time to evolve? I love the idea of decentralization but I’m not 100% sold on it just yet.
    Here’s the link to my post!

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