Electric utilities across the country are going through a period of massive change. You see it in every corner of the industry. It is, as Lisa Wood, vice president at the Edison Foundation, said, “a profound but quiet transformation.”
The three “megatrends” involved in these changes are a transition to clean energy, increased digital and distributed grids, and a move to individualized customer services. Wood and others highlight these trends in Key Trends Driving Change in the Electric Power Industry, a series of essays by industry leaders.
As EPC experts, we find that it’s a fascinating transition that all energy consumers should be aware of (and may be aware of without knowing it!). Here, we take a look at these “megatrends” and what they could mean.
The energy industry is investing in a transition from coal to natural gas and constantly looking into other energy efficient solutions due both to demand and regulation.
As Wood outlines in the introduction to Key Trends, “the U.S. electric power industry has already reduced carbon dioxide emissions 15 percent below 2005 levels.”
Over the past two years, solar capacity almost doubled across the country, accounting for 28% of all capacity additions in the last year. Solar is the fastest growing source of renewable energy in the United States. Tom Werner, president and CEO of SunPower, states, “We are entering an unprecedented solar revolution that will forever transform how we power communities.”
Frank Prager, vice president of Xcel Energy, highlights that his company is protecting its customers from variable natural gas prices by leading the nation with more than 5,700 megawatts of wind energy on their system now.
It’s easy to see that the future will hold new possibilities.
Digital, Distributed Grid
The electric power industry is investing over $20 billion annually in the distribution grid. Utilities are moving to a more intelligent grid through a digital communications overlay that increases the ability to control the grid and moves it closer to being “self-healing.”
That might sound like a lot of industry-speak. Put simply, it’s referring to two-way communication resulting in devices that connect directly with the grid. It’s being driven by “the need for more reliable and resilient grid operations, for greater efficiency and control, and by the connection and interaction with the ‘Internet of Things.’”
This is seen in the deployment of over 60 million digital smart meters in the U.S. already. C3 CEO Thomas Siebel estimates that by 2020, there will be 25 billion connected things in use as a part of the Internet of Things.
Oracle Utilities senior vice president and general manager Rodger Smith says that customers are adopting to distributed energy resources (DERs) faster than anticipated. Oracle is working on the “utility of the future,” where utilities can be accessed and managed through smart phones and web-connected devices.
The end game may be bigger than imagined. “Utilities are now in a position to partner with, if not lead, cities to perform functions together that were not possible before,” says Silver Spring Networks executive chairman, Scott Lang. That can range from managing street lights digitally to programs like ConEd’s Distribution Automation program in Chicago that has “prevented more than 1.2 million customer outages.”
Individualized Customer Services
The industry is faced with a challenge that is positively influencing our future. Customers have specific needs and it’s pushing companies toward providing more and more individualized services.
Some businesses want to get more renewable energy to meet corporate efficiency goals. Cities are interested in customized micro-grids. Rural customers want to pull energy from their own solar panels. Users around the country are increasingly interested in controlling aspects of their home’s energy through web-connected devices like iPhones and Nest learning thermostats.
Customers want responsive technology, and they can get it almost anywhere. That’s summed up neatly in the title of an essay by Ron Binz, past chair of the Colorado Public Utilities Commission. It’s called “No More Average Customers.” It’s something we understand at Beta. There are no more blanket solutions in any industry.
Binz highlights the challenge through an example, pointing to the variety of home entertainment options available to us: “broadcast, cable, satellite, or phone company TV; streaming Netflix, Roku, Hulu, sling TV, Apple TV and Amazon TV, just to mention a few.”
It’s more complicated in utilities, but there are companies are leading the charge. “We are putting pieces of the energy puzzle back together and providing innovative customer solutions—redefining customer expectations in the energy space much like Uber did for the taxi industry,” says Mary Anne Brelinsky, president of EDF Energy Services.
It’s an exciting time for energy utilities. The world is changing rapidly and these “megatrends” are helping to define a new era in energy.