Competitive purchasing of energy could apply to individuals, groups
Contact: Rene Abadie
HAMMOND – A method of purchasing energy that has resulted in millions of dollars in savings by large companies and municipalities could be adapted for individual and neighborhood use with consequent reductions in energy costs, according to an expert in the field.
Reverse auctions, in which large purchasers of power match their energy consumption needs with supplier capacity, are not just creating energy cost savings but also encouraging smarter energy production and allocation on the grid, explained David Wyld, Maurin Professor of Management at Southeastern Louisiana University.
“In deregulated environments – such as in Texas and a number of East Coast states – consumers are not limited to usual local provider but are able to purchase from a number of sources, along the lines of the deregulated telephone industry,” said Wyld. “In those environments, reverse energy would help consumers save on their energy bills and ‘go green’ in the process.”
Wyld’s proposal to develop an e-marketplace for consumers has been entered in the GE Ecomagination Challenge (www.challenge.ecomagination.com/ideas), which runs through the end of September. The challenge is seeking innovative ideas in smart energy generation and usage. Winning projects will be funded with a total of $200 million in capital. GE is using online votes to help determine the ideas that will move forward to become finalists for seed funding. Wyld is seeking votes on his “Reverse Energy” proposal from individuals and groups who support the concept at http://bit.ly/dcm5xw.
“One thing that is certain today is that for all the abundance of energy resources we have, there is a great deal of improvement in how we allocate, distribute, buy and sell electricity,” said Wyld, who serves as the director of the Reverse Auction Research Center. “With the advent of electrical deregulation in an increasing number of states, Louisiana not being one of them, and the newfound capability for businesses and consumers to actually return energy to the grid, the marketplace is ripe for a competitive bidding approach to bring real time supply and demand efficiency to the energy marketplace.”
Wyld’s proposal would be to develop an exchange site that would bring real time efficiencies to the energy market. It would be a competitive bidding exchange where individual consumers and groups of residents in an area could post their energy requirements and have rival energy providers compete for their business.
“In this environment, big utility firms would compete with both companies and individuals who would be returning excess energy capacity to the grid to supply the energy needs of individual consumers,” he explained.
Through a reverse auction process, consumers – acting individually or in concert with others in their area – would post their energy buying requirements on the exchange, he said. The pre-qualified utility companies and alternative energy providers would be able to bid for the business.
Wyld said reverse energy has the promise of incentivizing green energy procurement and bringing the benefits of competitive bidding to individuals and consumer groups.
“It’s an appropriate solution to give consumers power to choose their energy providers and for electrical power providers to compete to make green energy more available and more affordable for the growing numbers of consumers who find themselves with the right to choose their energy providers.”