Many recent news stories discuss how societies must become more dependent on renewable energy. Relying on fossil fuels is not sustainable, but investing in renewables helps ensure our planet’s future. However, evidence suggests that energy deregulation and privatization could both impact these resources.
Energy deregulation attempts to resist energy company monopolies by increasing the number of competitors in the marketplace. The process functions with a reverse auction, whereby energy providers aim to sell their offerings at the lowest possible rate. The energy goes through the existing infrastructure. The utility companies that own it transmit the power to customers, but they don’t set the prices paid.
Privatization occurs when the responsibility of supplying energy to the people who need it transfers from public-funded ventures, such as those operated by the government, to privately held companies. Let’s take a look at how deregulation and privatization in the energy market could influence renewable energy.