What do Gerald Ford, a fossil-fuel plant on the Houston Ship Channel, the second-largest utility in Vermont, and the California legislature have in common?
They each ushered in a major national market transformation in the U.S. power sector over the last 40 years, at a rate of one per decade.
And in 2016, right on schedule, that once-per-decade cycle repeated. This year, it was batteries that made a transformative advance into both the competitive and vertically integrated power markets.
A quick review of how competition entered the power industry, decade by decade:
- 40 years ago: Energy efficiency bills signed by President Ford established incentives to encourage demand management.
- 30 years ago: Generation competition launched as the AES Deepwater co-generation plant began operating in Houston under PURPA.
- 20 years ago: Retail competition launched with Green Mountain Power, then the second-largest utility in Vermont, offering renewable energy choices in the first retail pilot programs in New England.
- 10 years ago: Solar competition launched as California’s legislature passed SB1 supporting the California Solar Initiative, thus creating terminal market velocity for distributed solar to orbit across the U.S. — the ultimate form of retail choice.
- 2016: Battery competition hits early, widespread market penetration, culminating with FERC’s November efforts to establish national standardization for energy storage participation in organized wholesale markets.
- With four momentous market transformations under our belts, what have we learned that can inform industry and advocates’ efforts on the next stage of power market design evolution including central and distributed storage? Here are five conclusions.
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