Electricity Deregulation and the California Energy Crisis. Electricity and energy What happened in California? Utility deregulation in NE and Maine Future trends, including renewables The big picture. What is electricity?.
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ANSWER: Inefficient market
(move from monopoly to market and choice)
Utilities owned transmission lines
Utilities own distribution systems to homes and businesses
Plants sold to private companies. Prices set at auction by CA Power Exchange.
Transmission lines, grids in Independent System Operator (np)
Utilities still own distribution systemsCALIFORNIA DEREGULATIONThen Now
Better wholesale market design (less spot market use)
Create real-time pricing for consumers
Provide transparency, efficiency, choice
Add co-generating capacity/rethink size
Think distributed generation/”off grid”
Improve transmission infrastructure
Use gas storage to moderate volatility
Re-evaluate regulatory system
Use life-cycle analyses
Anticipate surprisesNew Approach to Deregulation
new size, MW
Sources: US Energy Information Administration; Rocky Mountain Institute
A variety of distributed-generation technologies are available or under development.
Costs of producing power can vary widely, depending on location, size, use and fuel prices,
but here are estimates:
Photovoltaics (solar panels) Converts sun lights into electricity 22-40 cents
Wind turbines Wind blades power electricity-producing turbines 4-28 cents
Diesel generators Similar to truck engines, also run on natural gas 7-12 cents
Microturbine Scaled-down jet engines that run on natural gas,
methane or waste gases 7-10 cents
Fuel cells Chemical reaction produces electricity and water No commercial production
* Per kilowatt-hour, without subsidies. For comparison, the average U.S. retail electricity price
earlier this year 6.9 cents per kwh.
Source: Department of Energy; National Renewable Energy Laboratory;
American Wind Energy Association; manufacturers
From WSJ, Sept 17, 2001 Think Small by Robert Gavin
Mtoe*World Consumption of End-Use Fuels, %
* Million tonnes of oil equivalent
Source: International Energy Agency