Electrical Generation Strategy : Free Markets

Interesting in that people are more concerned about reliability then quantity? And consumers are willing to pay more for electricity if they see that it will be there when the want it.

Little wonder governments find it necessary to over regulate electrical power, life is totally dependent on it and therefore such a good way for politicians to control the population. If the source was independent, market controlled, the population of consumers could become more individually driven rather then depend on government bureaucrats for survival.

But the base reality is, individual freedom is a stake in the heart to the progressive socialist. Dependence is the very soul of liberalism, a strategy of Marxist progressive socialism. Control the source of existence, electrical generation, the citizen will have no choice but to become dependent on those in power.

One of the best examples of this in this country is California. Over regulation and environmental demands on electrical generation sources like nuclear, coal and natural gas, demanding more and more of the generation of electricity come from green sources, wind, solar and biofuels, has crippled the state's economy and forced up prices to the point where in the very near future, the average citizen will need to reallocate funds from basic needs like food to energy consumption.

Using the Free Market to Expand Access to Electricity
February 26, 2013
Source: Paul Ballonoff, "Providing Access to Electricity for the Unserved: A Free-Market Solution," Cato Journal, Winter 2013.

For the world's 1.4 billion people without access to electricity, the traditional solution to the problem seeks to improve and expand service from an established monopolistic electricity supplier.  However, free market solutions to electricity development could be more effective at expanding access to electricity, says Paul Ballonoff, a specialist manager in the emerging markets practice of Deloitte Consulting LLP.

• In many emerging markets, private free market suppliers of electricity are illegal and the established monopolies are often government owned and operated and frequently unreliable.
• These monopolies are legal monopolies, not natural monopolies, and as such do not compel consumers to voluntarily purchase the regulated monopoly provider's electricity.
• Instead, consumers opt to pay higher prices for free market insurgent provider s' electricity or consumer-reliable alternatives like kerosene, which have no natural monopoly attached to them.

Worldwide electricity demand is projected to grow by 2.2 annually, driven by developing countries and electric car expansion.

• Though existing monopolies offer lower prices, competition drives reliability -- a key factor in transitioning developing countries from kerosene and other alternatives to electricity.
• While counterintuitive, the bottom of the pyramid, which comprises 80 percent of the world's population, has substantial spending power and would willingly substitute current energy sources for electricity, provided that distribution networks and competition make it possible.
• Electricity consumers pay for reliability more than for volume of electricity.

In current electricity systems, highly regulated grids, artificially low prices and heavy subsidization create prices that do not reflect the real cost to consumers. Even with regulation of principal suppliers in these systems, costs are much higher than regulated costs because consumers have to purchase backup energy to ensure reliability.
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Ballonoff proposes that local distribution systems evolve according to local economic conditions and that each local grid be isolated from adjacent grids' instabilities by creating direct current connections as opposed to alternating current connections. Doing so would ensure reliability and harden local distribution systems against system wide failures like the blackouts that India experienced in 2012.