Greater decentralization of power generation can, in my opinion, only strengthen the electricity market. Deregulation brought about greater competition amount generators, greater variability among the types of electricity generated, and ultimately a better economic choice for consumers (1).
Not that deregulation is easy. There is still much oversight needed to ensure that the electricity system is not compromised. Transmission and distribution must be maintained; an adequate supply MUST be remain intact; and both generators and consumers must be economically motivated (1,2). There are some systems that may allow utilities and generators to gouge their customers; state regulators must keep a mindful eye on consumer prices, while still allowing a reasonable profit margin for the utilities. With a diversely deregulated generation market, there must be a lower threshold maintained, as well as enough capacity to manage demand spikes. Logistical structures must be put in place to ensure that the system as a whole functions smoothly.
But the benefits can well be worth it. The introduction of more generators make the generation market a competitive one. This will ultimately make generation systems more efficient and drive down prices. It will also allow for more types of generators to enter the market: specifically, environmentally friendly ones. This will allow for a great deal of improvement in battling climate change as well as all the associated pollution risks with traditional power generation. The pressure to increase efficiency will drive the market to create new forms of technology, techs that can be disseminated through the industry. As new technologies develop and efficiency increases, consumers will benefit from reduced rates.
I personally think that there is a great potential for microgrid development as well. There have been several examples of microgrid technology “improving grid resiliency, reduc(ing) emissions, and increasing effiency” for local markets. These microgrids – localized islands of power generation, can provide backup power to cities (3), site redevelopment (4), and commercial complexes (5).
The businesses that can develop in this new emerging market are widespread. They can range from many types of small scale generators, new equipment installers, to consulting groups working with companies to ensure compliance.
- “Lowering Electricity Prices through Deregulation”. Federal Reserve Bank of New York, December 2000
- “The Failure of Electricity Deregulation: History, Satus, and Needed Reforms”. Public Citizen’s Energy Program, March 2007.
- “What happens if Hoboken goes dark?” http://www.nj.com/hudson/index.ssf/2014/11/what_happens_if_hoboken_goes_dark_mayor_hopes_a_50m_microgrid_will_solve_blackout_woes.html
- “Solar powered microgrid” http://www.energybiz.com/magazine/article/378677/solar-powered-microgrid