Beyond the Smart Grid: Challenges in the Electricity Markets

Source: Brookings Institution, Energy Security Initiative and Metropolitan Policy Program, September 2009

President Barack Obama has made it clear that transforming the U.S. economy from a fossil fuels-driven to a “green” economy based on domestic, renewable energy sources is a top priority for his administration. The electricity grid is an essential part of this modernization process. The “smart grid” has received considerable attention as well as substantial financing in the American Recovery and Reinvestment Act. However, electricity transmission and distribution systems remain highly fragmented and regionalized, supported by various owners, regulators, and operators. Major challenges exist around creating the appropriate governance mechanisms to develop our electricity infrastructure.

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