EBF 483
Introduction to Electricity Markets

12.6 Summary and Final Tasks

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Summary

The last lesson in the course has emphasized a few ways that new technologies in the electric power grid are affecting markets and power grid operations. We have focused on three areas:

  • The “smart grid” has enabled electricity customers to become more active participants in the electricity market by competing alongside power plants to provide demand response, or paid reductions in electricity use.
  • Growth in the amount of wind and solar energy connecting to regional power grids has had the market effect of depressing LMPs, even at times to negative levels. This is good for consumers of electricity but makes the economics of producing electricity very difficult.
  • Rooftop solar PV, especially when coupled with energy storage, has the potential to be very disruptive to the business model of electric utilities.

This is a very interesting time to be studying the electric power industry because technology is disrupting the grid, market and business models very fast – perhaps faster than ever in the entire history of the electricity industry. What the power grid will look like in a decade or two (or whether there will even be a “grid” to speak of) is basically anyone’s guess. Whatever the path of technological progress, however, it is important to remember that the power grid is very tightly connected to its regulators and that technological progress will always be met with some kind of regulatory response.

Reminder - Complete all of the Lesson 12 tasks!

You have reached the end of Lesson 12! Double-check the to-do list on the Lesson 12 Introduction page to make sure you have completed all of the activities listed there.