Influential Think Tank: Electricity Competition Key to Smart Energy Grid, Technology Innovation

The COMPETE Coalition has long advocated competition in electricity as integral to unlocking technology innovation, development and jobs growth - as we all experienced when competition was injected into telecommunications and other formerly monopoly industry sectors. So we are especially enthusiastic when other voices join us in underscoring this important policy point, as when the Environmental Defense Fund joined us in highlighting the link between competition, technology innovation and environmental benefits.

Now NDN, an influential Democratic policy think tank, has released a comprehensive report pointing to competition in our nation's electricity markets as the launching pad for innovation, such as smart grid technologies and greater development of renewable energy. The report, Electricity 2.0, finds that monopoly protections and hybrid competition in a state-by-state patchwork thwart market entry of new clean energy generation and technologies. Instead, NDN advocates an "Open Energy Network" that would allow competition to provide environmental, economic and technological benefits for the entire country.

NDN urges moving the power industry to a national framework that removes barriers to the open flow of electrons from generators to consumers.  The report advocates that market participants and utilities must be free to engage in open competition across extended geographic region to drive innovation, encourage energy efficiency and reduce costs.

NDN’s report advocates fully open and competitive markets to encourage development of clean energy, such as wind and solar, by sending price signals to potential investors. Greater competition would also facilitate efficiency innovation and help enable the smart grid and other innovations by stimulating new technology, demand response programs, and energy storage.

The report holds out the prospect that national positive competitive reforms can help bring lower electricity costs for consumers. The report accurately identifies monopoly markets as unresponsive to market forces and the downward price pressure enabled by competition. Open electricity markets match demand to supply through markets where suppliers must competitively bid, thus helping to create lower price options for consumers.  

NDN identifies successful market reforms as examples of how competitive markets can stimulate clean energy, innovation, and pricing options.

We’re glad that NDN has added its perspective on how competition can best serve America’s environment, consumers, and the economy.