Part 1: How markets today are out of sync.
Sonia Aggarwal is the Director of Strategy at Energy Innovation: Policy and Technology LLC, where she works on policies to transform the electric grid and reduce emissions into a clean, reliable, and affordable system. Robbie Orvis is a policy analyst for Energy Innovation’s Smart Energy Policy program area. The authors thank Kurt Adelberger (Google), Katherine Hamilton (Energy Storage Association), Devra Wang (Natural Resources Defense Council), Eric Gimon (independent consultant), Michael O’Boyle (Energy Innovation), and Hal Harvey (CEO, Energy Innovation) for helping.
Today's electricity grid is in a state of mass transition, as advances in information technology emerge just as the underlying hardware is itself undergoing massive improvements in cost and capability. These advances make it clearer than ever: The time has come to optimize the grid. And the need is particularly acute at the edge of system - on the distribution side of the grid. But grid operators have yet to capitalize on the value of optimization because regulations and power markets have fallen behind the technology.
This situation is not wholly unlike what we saw during the closing decades of the last century, when rising fuel costs coupled with inflation forced rates up, leading eventually to a restructuring of the electricity sector.