Decentralizing the Grid
The impetus for change in monopoly electric systems has ebbed and flowed for over three decades. Over the past 15 years the interest in and ability to update electricity system technologies has grown, due to the combination of changing policy objectives and widespread digital innovation. Whether you call it smart grid or grid modernization, digital technologies by now have long had the potential to transform electric systems, improving their operations, reducing waste and idleness, and (but I repeat myself) having more market-based systems. Separate but complementary improvements in the performance and production costs of distributed energy resources like solar PV, electric vehicles, and battery storage, along with the policy focus on decarbonization, have amplified interest in and work on digitalization. Digitalization has reduced transaction costs and created unforeseeable types and amounts of value in the rest of the economy. Shouldn’t it do so too in electricity?