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Jevan smith-project
- 1. The Energy Market By Jevan Smith
- 2. Energy Market Structure Competitive Energy Market Deregulation vs. Regulation Government Regulation The price of energy Incentives in the energy market Conclusion Introduction
- 3. Before the 1990’s utilities controlled the entire electricity market, they had what is called a vertically integrated monopoly… Vertically-integrated monopoly: Is when a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and/or distributor. In a regulated electricity market a single company is normally referred to as a utility Energy Market Structure
- 4. Deregulated states allow a complete retail competition model for energy Improves efficiency Competition drives energy prices lower and lower Innovations are made Competitive Energy Market
- 5. Deregulation vs. Regulation Regulated electricity market: “a single company, normally referred to as a utility, owns all the infrastructure – the physical stuff that stores and distributes electricity, like transformers, poles, and wires….” Deregulated electricity market: “while the utility still owns all the infrastructure and is still responsible for distributing electricity to your home, competing electricity providers are allowed to buy the electricity and sell it to you directly….”
- 6. Market failure: A situation where free markets fail to allocate resources efficiently. Negative externalities: consumers and or producers fail to take into account the effects of their actions on a third party Inequality: The gap between rich and poor Government Regulations
- 7. The price of energy Supply and demand impact the price of energy as well as government regulations, these in particular shape the price of energy As an example, a power plant is destroyed by a earth quake causing the price of energy to rise
- 8. Incentives: is something that motivates someone to perform an action. For example, pollution permits are incentives for firms or individuals not to pollute. Incentives to use less power Incentives in the energy market
- 9. We have discovered that the energy market is full of relevant information in relation to the microeconomic subject. We covered incentives, monopolies, government regulations, competition and much more… Thank you for your time and attention Conclusion