Big, bold new ideas for utilities?
- Posted on April 23, 2012
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I wrote about the Rocky Mountain Institute's involvement with utilities and major initiatives around energy efficiency in commercial building space last week. If you missed it, refer back to "The Biggest Ideas, Outside the Power Industry?"
The RMI worked with Duke Energy on scenario planning to determine its portfolio mix in a carbon-constrained context set by CEO Jim Rogers. The group worked with the owners of the Empire State Building to cut energy use in that globally iconic building by 35 percent. That's big stuff by anyone's standards—almost.
One back channel response from a man who claimed to "deal in facts" and eschew "ad hominem attacks" called the RMI "radical environmentalists." I show mercy by not naming names. I asked what he thought of Duke's CEO Jim Rogers. No response.
It made me realize that many good ideas and new ways of thinking for utilities may never take root when minds are closed shut. I have heard a self-described power industry expert say that the simplest solution to future power needs is to build a lot more coal-fired power plants.
Well, the future is an opt-in environment; if you don't want to go there, you're free to opt-out. The rest of us will be shaping the future through the use of open minds. So here's a brief recap on ideas presented in the past two weeks. You can almost hear some minds springing open and other snapping shut. So be it! The rest of us can have a look at the big ideas.
Smart meters and advanced metering infrastructure have been sold by some utilities, in part, as improving outage management by pinpointing problems and diagnosing them. But in "Managing Expectations on Outages?" Accenture executives pointed out that systems integration issues remain a hurdle for many utilities in this area. Will the fundamental value propositions used to sell the "smart grid" remain elusive long enough to derail public support? That's a big idea, if not the kind we'd like to deal with.
In "New Metrics for Customer Service?" Jamie Wimberly, CEO of DEFG and EcoAlign, which work on customer issues, proposed new metrics for customer satisfaction, which could translate positive customer experiences into revenue rather than the traditional notion that customer service is a cost center only. I should think utilities would be jumping all over the possibilities there.
In "Bulk Energy Storage: A Modest Proposal," the Coalition to Advance Renewable Energy Through Bulk Storage or CAREBS, suggested a multi-point plan for advancing the market for energy storage without onerous mandates for utility procurement. These are ideas well worth exploring, as we've seen in our coverage of California's deliberations on energy storage policy that the industry's "holy grail" remains elusive. I should think a paper like this one would generate some serious discussions in the industry. Storing electricity in an economical and financially beneficial way? Dang, that's one of the biggest ideas around.
Can utilities survive as rooftop, neighborhood and community distributed generation and microgrids flourish? We explored that big idea with John Farrell, who directs the Energy Self-Reliant States and Communities program for the Institute for Local Self-Reliance in "Utilities Facing a Distributed Generation Future?" The grassroots efforts towards energy self-sufficiency, for economic reasons, and utilities and the survival of centralized power—if that ain't a big idea worth considering, I don't know what is.
Finally, along the same lines, in "Power Utilities' Morphing Future" and "Utilities Race to Reach the Customer" I raised questions around how wisely and swiftly utilities can reassess and redirect their business models while those third-party advancements penetrate their (former?) customers' minds and pocketbooks. Big ideas? I'd think so, but I've been wrong before.
The bottom line is that nearly every utility is pursuing objectives such as energy efficiency, demand response, customer engagement and renewables integration that some 40 years ago might have been mischaracterized as "radical environmentalism." Today, not so much—these are mainstream ideas and the only debate is how best to implement them.
So if you're a stickler for "facts," welcome to reality. These changes aren't being forced on utilities by third parties; they're being embraced by the leadership of the power industry.
But, like I said, it's an opt-in future. Join us if you like. Or become a living fossil. Your choice.
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