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Promise of Energy Deregulation

October 11, 2017

The Promise of Energy Deregulation

When the energy markets began to deregulate in the late 1990s, the promise was that energy deregulation would bring increased consumer choices and innovation to the industry. 20 years later, and the results are mixed.

When the markets deregulated, the large energy monopolies were broken into four pieces. Two of these pieces – the transmission and distribution of electricity – remained under the control of large regional monopolies. However, the generation and retailing of electricity were opened for private competition.

Market Players in the Energy Industry EnPowered Deregulated Energy Retailer

Generation deregulation:

When the energy market was fully regulated, there was very little investment into new technologies like solar or wind. With the deregulation of the energy markets, there are now thousands of small companies installing solar panels on rooftops across the world. The deregulation of energy generation has allowed small companies to begin to change the face of this industry.

We are beginning to move from a heavily centralized power system to a decentralized power system. With millions of solar panels and wind turbines scattered across a country, a huge number of new and innovative solutions are also becoming available to reduce transmission losses by consuming electricity closer to where it was produced.

This deregulation has even given everyday homeowners and businesses the opportunity to produce their own electricity with solar or wind, store electricity on their properties with batteries, and even go completely off the grid.

Although there is still a lot of work to go, the deregulation of energy generation has largely delivered on its promises.

Retail deregulation:

The deregulation of energy retailing has been much less noticeable. Although it has had a major impact on the ability of industrial and commercial customers to control their energy costs, it has done little to help homeowners or small businesses.

Retail deregulation was supposed to lead to significant innovation Behind the Meter, meaning in your home and on your electricity bills. The promise was that innovative new technologies would lead to significantly decreased electricity costs for individuals and the grid, and allow consumers to control their energy usage and costs.

Instead, for the most part, the energy retail industry has primarily become full of door-to-door scams and multi-level marketing schemes. There has been very little true innovation in the markets, and most consumers are completely avoiding the industry at large. In many deregulated energy markets, over 50% of homeowners continue to buy their electricity from their utility instead of switching to a private energy retailer.

The energy retail sector has largely failed to deliver on its promises. EnPowered is hoping to change that by working to give control back to our customers. Giving power back to the people.