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I haven't invested in the infrastructure because electricity is not my business. If it were my business, I would still be at the mercy of giant incumbent compe

I haven't invested in the infrastructure because electricity is not my business. If it were my business, I would still be at the mercy of giant incumbent competitors, and any dollar I spent on common infrastructure would benefit them more than me. They could then use that advantage to slowly force me out of the business. The largest firms have the most to gain from improvements in the industry's infrastructure. So the onus is largely upon them to make such improvements. In many cases, there is only one firm with significant pricing power--the natural monopolist--and everyone else in their territory has to dance to their tune. They're the only ones capable of improving infrastructure, aside from a government. The pricing power is the only way for a firm to afford projects that are neither profitable nor a competitive advantage. The only point for everyone else in the market to having firms with pricing power is so they can undertake those projects that benefit everyone in the long run. If you're not going to improve the industry, there is no advantage for everyone else to allow you to remain as the natural monopolist. The logical thing for them to do is to seize your capital by force and transfer it to someone who might do more with it (but might do less). A natural monopoly does not mean the same firm will always have pricing power, but that the modal situation is that only one firm has it at a time. When natural monopolists are protected as de jure protected monopolies, yes it does prevent redundant investment, but it also puts no competitive pressure on the monopolist to remain the monopolist. I would guess that electric utilities would make wiser decisions about infrastructure if they were less protected from competition. That introduces the risk that a particular market might not be adequately served in an economic dominance war that wipes out both incumbent and challenger, but I think those crises would be very temporary, and would likely invoke a government intervention less costly than protecting the monopoly in the first place.

dragontamer 10y ago
We're talking about energy storage, are we not? If you think that energy storage "makes money", build a small 10MW battery plant to supply a neighborhood or two. Buy electricity when its cheap, sell it when its expensive. There's no "common infrastructure building" going on here. You own the batteries, and maybe you have to pay the big utility for some power-poles and comply with some basic regulations. The fact of the matter is: these sorts of infrastructure issues are being solved by the free market all the time. Frequency regulation, long-term energy storage (which really is just ~hours) and such are commonly subcontracted out to smaller companies who own small plants from the big utility companies. ------- > I haven't invested in the infrastructure because electricity is not my business. Then do the next best thing. Buy stock in companies that are doing grid-scale energy storage across this country.
- bmelton 10y ago
  Sell it to whom? Your neighbors? In a lot of municipalities, there's no such thing as "selling it when it's expensive" because the only customer is the utility, and the utility is only paying wholesale rate from solar / alternative energy customers. It may be an option in some places, but at present, I think you'd lose money under your current plan in a lot of places, and are unlikely to have neighbor-customers in many of the remainders.
potluckyears 10y ago
> If it were my business, I would still be at the mercy of giant incumbent competitors, and any dollar I spent on common infrastructure would benefit them more than me. They could then use that advantage to slowly force me out of the business. > The largest firms have the most to gain from improvements in the industry's infrastructure. [Large monopolistic firms are] the only ones capable of improving infrastructure, aside from a government. Under deregulated energy markets in the US, common infrastructure (specifically the transmission grid) is placed under the control of a non-profit Regional Transmission Operator or Independent System Operator. In practice the transmission lines are built and maintained by private for-profit companies, but their profits are fixed by regulation and they have to ask the RTO/ISO for permission to do basically anything. The point of this restructuring was to break up monopolistic control over the transmission grid so that new, small generation or distribution companies could join the transmission network at a fair hookup cost. Additionally, it helps deal with the issue of who pays/profits from improvements to common infrastructure. http://www.energysmart.enernoc.com/regulated-and-deregulated-energy-markets-explained http://www.energysmart.enernoc.com/regulated-and-deregulated...

dragontamer 10y ago

We're talking about energy storage, are we not? If you think that energy storage "makes money", build a small 10MW battery plant to supply a neighborhood or two. Buy electricity when its cheap, sell it when its expensive. There's no "common infrastructure building" going on here. You own the batteries, and maybe you have to pay the big utility for some power-poles and comply with some basic regulations. The fact of the matter is: these sorts of infrastructure issues are being solved by the free market all the time. Frequency regulation, long-term energy storage (which really is just ~hours) and such are commonly subcontracted out to smaller companies who own small plants from the big utility companies. ------- > I haven't invested in the infrastructure because electricity is not my business. Then do the next best thing. Buy stock in companies that are doing grid-scale energy storage across this country.

bmelton 10y ago
Sell it to whom? Your neighbors? In a lot of municipalities, there's no such thing as "selling it when it's expensive" because the only customer is the utility, and the utility is only paying wholesale rate from solar / alternative energy customers. It may be an option in some places, but at present, I think you'd lose money under your current plan in a lot of places, and are unlikely to have neighbor-customers in many of the remainders.

potluckyears 10y ago

> If it were my business, I would still be at the mercy of giant incumbent competitors, and any dollar I spent on common infrastructure would benefit them more than me. They could then use that advantage to slowly force me out of the business. > The largest firms have the most to gain from improvements in the industry's infrastructure. [Large monopolistic firms are] the only ones capable of improving infrastructure, aside from a government. Under deregulated energy markets in the US, common infrastructure (specifically the transmission grid) is placed under the control of a non-profit Regional Transmission Operator or Independent System Operator. In practice the transmission lines are built and maintained by private for-profit companies, but their profits are fixed by regulation and they have to ask the RTO/ISO for permission to do basically anything. The point of this restructuring was to break up monopolistic control over the transmission grid so that new, small generation or distribution companies could join the transmission network at a fair hookup cost. Additionally, it helps deal with the issue of who pays/profits from improvements to common infrastructure. http://www.energysmart.enernoc.com/regulated-and-deregulated-energy-markets-explained http://www.energysmart.enernoc.com/regulated-and-deregulated...