48
National, and regulatory jurisdiction boundaries. This is especially significant
because some aspects of energy systems are highly regulated (e.g., electric power)
and/or dominated by large public and private corporations (e.g., integrated oil and
gas companies).
In the USA, generation, local distribution, and retail sales of electricity have
historically been regulated at a state level. Thus, until the 1990s, vertically integrated electric utilities generated, transmitted, distributed, and sold electricity to
retail customers within states (see Sect. 10.3.5) at rates set by each state. Each state
would decide what power plants would be constructed by which utility, with (nuclear
power plants excepted) modest oversight from the federal government. However,
the US power system has become more distributed, utilizing power generated at a
distance, especially wind and solar farms built in locations best suited to them, with
more wholesale power crossing state lines regulated by the federal government. The
outcome has been a restructuring of electricity markets in most locations. In 2018,
two-thirds of Americans received their electricity via competitive, usually multistate, wholesale markets. The restructuring of US electricity markets is an ongoing
process.
The decision-making perspective also leads to a choice about taking a bottom-up
(i.e., starting with individual components) or a top-down (i.e., beginning with a
whole system) approach to viewing energy systems. Bottom-up approaches to
energy start with specific technologies of energy production, conversion, or use with
internal interactions dominated by physical, environmental, engineering, subcultural, and microeconomic factors. Top-down approaches are dominated by macroeconomic and policy and cultural considerations. They may also be dominated by
decisions made in arbitration unseen to most of society. For example, after the
Fukushima earthquake and tsunami that impacted one of Japan’s major nuclear
facilities, Germany decided to phase out nuclear power, thus ending contracts early
and subjecting it to major arbitration cases. In the example of US electricity markets
described above, historically, states have top-down projected demand and approved
new power plant construction and what type of plants are constructed, with costs
inserted into electricity rates charged to customers. Restructured electricity markets
are far more open to bottom-up power plant decisions by independent actors.
Chapter 20 includes many examples of decision-making processes and tools to
address conflicts that arise.
Energy systems can be studied at the scale of the following:
• Individual devices and machines.
• Buildings.
• Facilities ranging from a power plant to an industrial facility like a refinery or a
factory.
• Human communities such as cities or metropolitan regions (see Sect. 18.2).
• Regional transmission systems that connect multiple states or regions together.
• Particular energy resources, fuels, and energy products (e.g., electricity
systems).
• National and international multi- and total-energy systems.
P. Saundry and B. L. Ruddell
National, and regulatory jurisdiction boundaries. This is especially significant
because some aspects of energy systems are highly regulated (e.g., electric power)
and/or dominated by large public and private corporations (e.g., integrated oil and
gas companies).
In the USA, generation, local distribution, and retail sales of electricity have
historically been regulated at a state level. Thus, until the 1990s, vertically integrated electric utilities generated, transmitted, distributed, and sold electricity to
retail customers within states (see Sect. 10.3.5) at rates set by each state. Each state
would decide what power plants would be constructed by which utility, with (nuclear
power plants excepted) modest oversight from the federal government. However,
the US power system has become more distributed, utilizing power generated at a
distance, especially wind and solar farms built in locations best suited to them, with
more wholesale power crossing state lines regulated by the federal government. The
outcome has been a restructuring of electricity markets in most locations. In 2018,
two-thirds of Americans received their electricity via competitive, usually multistate, wholesale markets. The restructuring of US electricity markets is an ongoing
process.
The decision-making perspective also leads to a choice about taking a bottom-up
(i.e., starting with individual components) or a top-down (i.e., beginning with a
whole system) approach to viewing energy systems. Bottom-up approaches to
energy start with specific technologies of energy production, conversion, or use with
internal interactions dominated by physical, environmental, engineering, subcultural, and microeconomic factors. Top-down approaches are dominated by macroeconomic and policy and cultural considerations. They may also be dominated by
decisions made in arbitration unseen to most of society. For example, after the
Fukushima earthquake and tsunami that impacted one of Japan’s major nuclear
facilities, Germany decided to phase out nuclear power, thus ending contracts early
and subjecting it to major arbitration cases. In the example of US electricity markets
described above, historically, states have top-down projected demand and approved
new power plant construction and what type of plants are constructed, with costs
inserted into electricity rates charged to customers. Restructured electricity markets
are far more open to bottom-up power plant decisions by independent actors.
Chapter 20 includes many examples of decision-making processes and tools to
address conflicts that arise.
Energy systems can be studied at the scale of the following:
• Individual devices and machines.
• Buildings.
• Facilities ranging from a power plant to an industrial facility like a refinery or a
factory.
• Human communities such as cities or metropolitan regions (see Sect. 18.2).
• Regional transmission systems that connect multiple states or regions together.
• Particular energy resources, fuels, and energy products (e.g., electricity
systems).
• National and international multi- and total-energy systems.
P. Saundry and B. L. Ruddell