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The View from Inside the Tornado We Call the Energy Revolution

Photo by Jamie Street on Unsplash

The rapid pace of change we are witnessing in the energy industry reminds me of Geoffrey Moore’s book Inside the Tornado. We seem to be in that period which Moore refers to as the “tornado”. Rapid adoption of distributed renewable resources using solar and wind technologies, Comcast offering me $1,200 to install solar panels on my house, CHP units being installed at hospitals and other large consumers of power, Green buyers taking matters into their own hands by establishing buyer alliances and establishing long term contracts for power (REBA), States passing legislation that encourages, and rewards, investment in renewable energy projects, wholesale markets under duress, fuel security concerns and the list goes on. All of these are indications that we are now in the tornado phase of the revolution, marked by the rapid changes coming from all directions. To quote Geoffrey Moore, “How could so much change be wrought in so little time”.

The tornado phase is a make or break time. The rapid changes in technology which Moore writes about are now manifesting in the Electricity Sector. Borrowing a line from “Inside the Tornado”, the Electric Industry, “like everything else on our planet are being shaped by the forces of evolution. Your mandate is unchanging: Innovate or Die”

But unlike the high-tech space that Moore writes about, where the next flashlight app goes viral or dies on the vine, the electric industry has life or death consequences. We must get this right to avoid unintended consequences from occurring, and that requires careful coordination among industry stakeholders.

Over the years, both Congress and FERC have provided sound guidance and leadership in how we can move forward during trying times, such as those we are currently experiencing in the Electric Industry. As a reminder for what is possible, I provide an excerpt from a FERC regulation that sums it up nicely:

https://www.govinfo.gov/content/pkg/FR-2018-12-03/pdf/2018-26158.pdf

As the Commission found in Order No. 587, the adoption of consensus standards is appropriate, because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of industry participants representing all segments of the industry. Moreover, since the industry itself must conduct business under these standards, the Commission’s regulations should reflect those standards that have the widest possible support. In section 12(d) of the National Technology Transfer and Advancement Act of 1995 (NTT&AA),13 Congress affirmatively requires federal agencies to use technical standards developed by voluntary consensus standards organizations, like NAESB, as means to carry out policy objectives or activities determined by the agencies unless an agency determines that the use of such standards would be inconsistent with applicable law or otherwise impractical.

Let’s all take a moment to acknowledge that we are in the tornado phase of the electric industry revolution and recognize that our industry has life or death consequences across a broad population that relies on reliable electricity. As FERC indicated in the excerpt above “the adoption of consensus standards is appropriate, because the consensus process helps ensure the reasonableness of the standards by requiring that the standards draw support from a broad spectrum of industry participants representing all segments of the industry”. This will require the collective knowledge, intelligence and dedication of all stakeholders, using a consensus-based approach, to find our way to “Fair winds and following seas”.  

Richard Brooks's picture

Thank Richard for the Post!

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Bob Meinetz's picture
Bob Meinetz on April 19, 2019

Richard - stepping outside the tornado, for a minute -

One of the quickest ways to avoid a conversation at parties is to bring up the subject of grid electricity. It seems people who care where their electricity comes from make up an infinitesimal part of the population, that most would rather not have anything to do with some "Energy Revolution". After all, revolutions come about when a government, or technology, is not doing its job - when there's a crisis - and most citizens are entirely happy with the quality of their electrical service.

The one thing they're not happy about is its price. Is the only purpose of adding levels of complexity to the relatively simple process of generating and selling 120V AC to add jobs, middlemen, and unnecessary technology, to make what's cheap more expensive, to widen the trough at which bloated monopolies already feed?

If not, it sure seems that way.

Richard Brooks's picture
Richard Brooks on April 20, 2019

Bob, as you've indicated, price is certainly a matter of concern, i.e. here in MA, some rates are at .24/kWh. I'm fortunate to live within a MUNI service territory so my rates are only .12/kWh. But there are other motives that are contributing to the push for change today: Green Energy Buyers are driving real change by establishing long-term power purchase agreements for green energy, States with their push to cut carbon through Green Purchases and the talk of carbon taxes. These are all real motives for change coming from a segment of the populace. Together these "price concerns" and "climate concerns" are creating momentum that cannot be ignored. We have two choices, accept that real change is coming and decide how to adapt or do nothing and let whatever happens, happen. The status quo is undergoing a remake.

Bob Meinetz's picture
Bob Meinetz on April 20, 2019

Richard, understood that people are concerned about both price, and climate change.

Though it's easy for customers to see their bill getting higher each month, it's difficult for most customers to understand why their "100% green energy" plan is a fraud (unless their electricity cuts off when renewable/nuclear energy is unavailable, it is indeed a fraud - they're relying on dispatchable fossil fuel to keep their lights on).

Which is worse: doing nothing about climate change, or being charged more to do nothing about it?

Richard Brooks's picture
Richard Brooks on April 22, 2019

Change is coming, regardless of how one answers your question. The real question you should be asking is: What's the best play for a rational player, given these changes. Here's a quote to ponder:

"health officials in Rochester, New York, calculated in 1900, the fifteen thousand horses in that city produced enough manure in a year to make a pile 175 feet high covering an acre of ground and breeding sixteen billion flies, each one a potential spreader of germs. "

I suspect the smart "cleanup crews" walking the streets of NY in the early 1900's moved on, and maybe innovated to open gas stations that served the new technology; "the horseless carriage".

The status quo is undergoing a remake.

Matt Chester's picture
Matt Chester on April 19, 2019

Great thoughts here, Dick, and a lot to chew on-- but I can't help but get stuck on "Comcast offering me $1,200 to install solar panels on my house"

Do you have a link to this type of program Comcast is running? I haven't come across this yet

Richard Brooks's picture
Richard Brooks on April 20, 2019

Hi Matt. I deleted the email from Comcast, but here is a link to their solar program: https://www.solar.xfinity.com/?campaign=145977035673192&CMP=KNC-43700035932063206&utm_source=GOOGLE&utm_campaign=search-brand-tier1&utm_medium=cpc&utm_term=comcast%20sunrun-289318861664-c-p-Solar_BR_Phrase_CA/MA/NJ&gclid=Cj0KCQjwhuvlBRCeARIsAM720HrEKfA6Q5KMBtkP_CvCO3_yfVPOXUQbp5-SHBUP9dytWpPSbiTncMoaAj09EALw_wcB&gclsrc=aw.ds

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