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An electricity market is a system that enables the exchange of electrical energy, through an electrical grid.[1] Historically, electricity has been primarily sold by companies that operate electric generators, and purchased by consumers or electricity retailers.
The electric power industry began in the late 19th century in the United States and United Kingdom. Throughout the 20th century, and up to the present, there have been deep changes in the economic management of electricity. Changes have occurred across different regions and countries, for many reasons, ranging from technological advances (on supply and demand sides) to politics and ideology.
Around the turn of the 21st century, several countries restructured their electric power industries, replacing the vertically integrated and tightly regulated "traditional" electricity market with market mechanisms for electricity generation, transmission, distribution, and retailing.[2] The traditional and competitive market approaches loosely correspond to two visions of industry: the deregulation was transforming electricity from a public service (like sewerage) into a tradable good (like crude oil).[3] As of 2020s, the traditional markets are still common in some regions, including large parts of the United States and Canada.[4]
In recent years, governments have reformed electricity markets to improve management of variable renewable energy and reduce greenhouse gas emissions.[5][6]
- ^ Tsaousoglou, Giraldo & Paterakis 2022, p. 3.
- ^ Glachant, Joskow & Pollitt 2021, p. 1.
- ^ Wollmann et al. 2010, p. 168.
- ^ Glachant, Joskow & Pollitt 2021, p. 2.
- ^ Cunningham, Thomas (15 February 2017). "Energiewende: From Germany's past to Europe's future?". Atlantic Council. Retrieved 9 April 2024.
- ^ Axup, Kate (27 September 2023). "Regulatory reform for the energy transition". Allens. Retrieved 9 April 2024.