Selected category: Utility Business Models

The Killer App for The Internet of Things? Combating Climate Change.

graphicCo-authored by David Kirkpatrick, Techonomy’s CEO.

When Elon Musk announced his lower-priced Tesla 3 electric car in the spring of 2016, he opened the press conference with rhetorical questions. “Why does Tesla exist? Why are we making electric cars?” The audience of car fanatics and techies didn’t expect the answer he gave, though a clue came from the fact that Musk was already working to fold his other company, SolarCity, into Tesla. He continued: “Because it’s very important to accelerate the transition to sustainable transport…for the future of the world.”

Then Musk started talking about the world’s “record CO2 levels,” noting, “The chart looks like a vertical line, and it’s still climbing!” He sees Tesla as targeting climate change — the cars will connect to the solar systems and home storage batteries, so “every individual is their own utility,” and less carbon is emitted. Not what you’d expect from a car company.

Musk seldom uses the phrase, but what he was talking about was the Internet of Things (IoT) — putting computing intelligence into the objects and systems that surround us, connecting them to the network, and stitching it all into a digital ecosystem. Tesla’s cars, solar collectors and batteries all are connected, communicating via the internet. While the concept of IoT has been batted around the tech industry for a decade, with companies including Cisco and Intel placing hefty bets on its success, only now — suddenly — is it starting to make sense. Read More »

Also posted in Clean Energy, Climate, Energy Innovation, Energy Storage, Grid Modernization, Solar Energy, Time of Use, Wind Energy| Comments are closed

Baseload Power is So Yesterday. A Cleaner, Modern Electric Grid Deserves Flexibility.

power-lines-unsplash2Coal-heavy utilities in the Midwest have mustered a new argument to secure subsidies for their uneconomic power plants. They used to suggest the plants were needed to maintain reliability, until regional grid operators declared there was plenty of generation to ensure the lights stayed on. They then attempted to argue the plants provided jobs and taxes to the local communities, until conservative economists highlighted the inefficiency of subsidies.

Now several utility executives, including the chief executive officer of American Electric Power (AEP), are trying to regale regulators with the importance of baseload generation. The argument goes something like this: Since some power plants – largely nuclear reactors and coal-fired power plants – have a hard time ramping up and down in response to changing electricity demand, the grid needs those units to operate all the time, to provide a “base” output of power.

Such last-century thinking, however, ignores the phenomenal advances provided by modern sensors, smart meters, and telecommunications. A combination of dynamic power options – like demand response (crediting homes and business for using less electricity when the power grid is stressed), renewable energy, and battery storage, among others – allow the grid to respond more nimbly than ever before. Rather than propping up old, lumbering baseload generators, we should prioritize a more modern, cleaner grid that focuses on flexibility and diversity. Read More »

Also posted in Clean Energy| Read 4 Responses

Distributed Energy Resources to Dominate at Gathering of Nationwide Utility Regulators

rp_Conference-300x200.jpgOn November 13, 2016, the nation’s state and federal utility regulators – also known as the National Association of Utility Regulators Association (NARUC) – will meet for their 128th annual meeting in La Quinta, CA and host over 1000 participants. As a former NARUC president and seasoned observer of these meetings, I study the issues that rise to the top for the limited amount of meeting time available. The topics making the cut offer a snapshot of what is trending nationally in the various regulated sectors.

Distributed resources – like residential solar, storage, and electric cars – not long ago nascent technology, are now mainstream. At this year’s NARUC meeting, issues related to the impact of distributed resources on business models and regulation dominate the electricity agenda as states strive to capture their benefits.

The conversation will tackle next-level questions of grid modernization, interconnection, valuation, business models, and rate design. Utility planners aim to correctly set conditions for continued growth in the transforming electricity sector. The meeting topics reveal changed thinking, from fixing “problems” caused by these technologies to  maximizing their potential  benefits. Read More »

Also posted in Clean Energy, Electricity Pricing, Energy Storage, Grid Modernization, Solar Energy| Comments are closed

Fraying Wires: How Policymakers Can Fix America’s Electricity Infrastructure

electric-pylonsOn any given day, half a million Americans lose power for two or more hours. Those blackouts cost our economy billions of dollars. 70 percent of the U.S. grid that delivers electricity to our homes and businesses is at least 25 years old, and comparatively we endure more outages than other developed nations. We suffer some 360 minutes of outages each year, compared with just 16 minutes for Korea, 15 for Germany, and 11 for Japan.

A new book – The Grid: The Fraying Wires Between Americans and Our Energy Future – offers these and other insights about the challenges of modernizing America’s electric grid – the set of wires and transformers that transmit and deliver power. According to the author, McGill University professor and cultural anthropologist Gretchen Bakke, our current system is “worn down, it’s patched up, and every hoped-for improvement is expensive and bureaucratically bemired.”

But change could be on the horizon. With a new president and Congress taking office in January, legislation to address America’s deteriorating infrastructure, like bridges and lead-laden water pipes, will likely be debated. High on their list of priorities should be new policies encouraging private-sector investment and innovation in the electricity sector.

Here are four ideas from Bakke that the new Congress and administration should keep in mind as they consider legislation that will lay the groundwork for America’s energy future. Read More »

Also posted in Clean Energy, Data Access, Energy Storage, Grid Modernization| Read 1 Response

Ohio Regulators Deliver “Undoubtedly Unconventional” Decision in FirstEnergy Bailout Case

power-lines-unsplash2In a long-awaited decision, the Public Utilities Commission of Ohio (PUCO) yesterday approved a $600-million electricity rate plan for FirstEnergy.

One read of the decision is, regulators killed the Ohio-based utility giant’s massive bailout and ordered the utility to modernize its grid. If accurate, this would be an incredible victory: Dirty power plants would not be subsidized, FirstEnergy would not be rewarded for its poor business decisions, and the company would invest in measures that increase efficiency and welcome clean-energy resources.

Ah, if the PUCO order were only so clear. On the one hand, it does seem the regulators are giving FirstEnergy $600 million upfront and requiring it to spend those funds on grid-modernization programs the PUCO will approve in the future. Yet, the more realistic read is, Ohio regulators are simply handing FirstEnergy $600 million in hopes the subsidy will allow the utility to improve its balance sheet. Then, FirstEnergy will (hopefully) propose grid-modernization efforts that the PUCO will consider and fund down the line. In other words, the PUCO is providing FirstEnergy a no-strings-attached subsidy.

The decision is unusual and a bit difficult to interpret – even the PUCO chairman admits the approach is “undoubtedly unconventional.” The only certainty is that this issue will not die. Environmental Defense Fund and its allies will continue to press the PUCO and the Ohio Supreme Court to ensure the $600 million goes toward building a cleaner, more modern electric grid. Read More »

Also posted in FirstEnergy| Comments are closed

New York and the Standby Tariff: A Breakthrough for Clean, Distributed Energy

ny-clean-fallFor New Yorkers wanting more clean, distributed energy, the recent Con Edison rate case offers some good news.

Presented to New York’s Public Service Commission (NYPSC), which regulates utilities in the state, a rate case is a process utilities use to adjust policies and set rates charged to customers. A rate case occurs once every few years and provides an opportunity for state and local governments, along with consumer and environmental advocacy groups, to seek cleaner, cheaper, and more customer-friendly electricity.

The Con Edison rate case is considered a bellwether for similar proceedings involving electric utilities throughout New York State – which is part of why a recent filing with the NYPSC is so important. Along with more than 20 other parties (including Con Edison, the Real Estate Board of New York, the New York Energy Consumers Council, and several environmental advocacy groups), Environmental Defense Fund (EDF) on September 20th filed a joint proposal with NYPSC that (among other recommendations) calls for changes to the current standby tariff that are likely to be approved by the Commission. Read More »

Also posted in Electricity Pricing, New York, New York REV| Comments are closed
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