The T&D grid, once deemed a bottleneck, will now face pressure from both ends. Is it still the same old monopoly?
Some 30-odd years ago physicist and philosopher Thomas S. Kuhn coined the phrase "paradigm shift" to describe a radical change in a mental framework for interpreting facts. His key work, "The Structure of Scientific Revolutions," published in 1962, focused on the role of paradigms in scientific thought - such as the Copernican sun-centered solar system or Planck's work in quantum mechanics. In the energy industry, however, the notion of shifting paradigms gained popularity only during the 1980s. Analysts began to use the phrase to communicate the profound changes in regulation and industry organization brought about by fostering open access to the natural gas transmission and distribution system, a process that began in 1985.
Nevertheless, while the idea of mandating open access to interstate transmission networks often is referred to as a "paradigm shift," it is easy to overlook the extent to which this seemingly new approach shares certain fundamental assumptions with the preexisting regulatory paradigm. Both assume there are rising economies of scale in transmission and distribution lines, and that supply - whether gas production or central station generation - is located a fair distance from the point of sale.