In his 1971 paper “The Theory of Economic Regulation”, George J. Stigler proposed a framework to consider the motivations of various stakeholders and the influence that they have on regulatory policies. His premise was that the state could use its power to prohibit or compel, through financial restrictions or benefits, to selectively help or hurt industries. Furthermore, the theory of economic regulation should explain the affected parties, form of the regulation and effects on allocation of resources. [Read more…]
Decentralization of US utility power generation (Lovins, 2002)
Most of the claims and data in this article are based on “Small is Profitable” by Amory Lovins at the Rocky Mountain Institute.
Distributed resources have emerged not simply as spontaneous technological development but as an evolutionary reaction to the shortcomings and costs of overly centralized resources. Looking through the lens of history, large generating units first achieved and then forfeited economic advantage. Although the maximum power plant size was forecasted to reach 3GW by 1990, it peaked at 1.4GW in 1970. Contrary to the intuition that bigger is more efficient, engineers, managers and policy-makers since the early 20th century have repeatedly been reminded that technological progress, financial requirements and practical constraints have a dramatic effect on the economies of large scale. [Read more…]