Energy Insider: Electricity
Is a U.S. Electric Supply Revolution Underway?
by Bob Shively, Enerdynamics President and Lead Facilitator
There has been discussion lately at energy conferences about whether the electricity industry is undergoing a revolution to a green distributed future or simply an evolution to a somewhat different grid still anchored by traditional central power plants. One of Bill Gates’ favorite scientists, Vacil Smil, continues to make a case that, due to the nature of energy infrastructure, transformations take a long time and we shouldn’t get too wrapped up the idea of a rapid revolution. Indeed, data shows that it took coal close to 25 years to become the leading energy source in the U.S. from the time that coal use initially began to escalate significantly. For petroleum it took even longer – more than 50 years. Renewables began their significant increase fewer than 10 years ago, suggesting that perhaps we have a ways to go until renewables become a dominant source.
Source: EIA Today in Energy, July 3, 2013
Should we believe that history is our guide? Or can the energy industry follow revolutionary transformations that have transformed other industries such as computing and telecom?
To gain insight, it is interesting to see what the utility executives who will make investment decisions that will drive change are saying. Not too long ago, utilities were planning ongoing expansion of coal baseload power plants, and there was talk about a nuclear renaissance as utilities in Tennessee, South Carolina, and Georgia began constructing new nuclear units. Then executives pivoted to a belief in natural gas as the shale gas revolution drove down prices and created apparent robust supply. But now, executives are saying something else.
In its 2018 State of the Electric Utility Survey, Utility Dive queried 686 utility industry leaders from the U.S. and Canada about trends for the electric industry. The results clearly demonstrate an almost universal expectation of dramatic change.
Responses to the Question: “How do you think your utility’s power mix will change over the next 10 years?”
This suggests a very different grid is coming our way. Integrating large amounts of utility-scale wind and solar has proven doable in early-adopter regions, but it does require changes to the way the bulk grid (generation and transmission) is operated. Strategies include:
- Adding flexible generation such as gas units to the grid
- Increasing dispatch regions to cover large geographic areas
- Reformulating markets to provide for real-time and day-ahead trading across large geographic areas
- Improving techniques to better forecast wind and solar output in real-time and day-ahead
- Planning transmission regionally
We are just on the cusp of implementing techniques to integrate large penetrations of distributed generation as well as both grid-scale and distributed storage. Concepts being developed include:
- Initiating long-term and system-wide distribution resource planning
- Upgrading the distribution system to implement various components of an advanced grid
- Developing distribution level markets for grid support, demand response, distributed generation, and distributed storage
- Reformulating rate structures to recognize the need to support the grid while fostering use of distributed resources
- Rethinking the role of the distribution utility
In the utility business, none of this will happen overnight. Regulatory and business barriers will fall more slowly than those related to technology development. When the State of the Utility survey asked “What’s the single greatest challenge associated with your changing fuel mix?” the highest-ranked answer (which received twice as many responses as the next highest answer) was “Uncertainty over market conditions and regulations for future generation.”
I'd say from a technology standpoint, we are at a revolutionary stage. But whether that means the energy business is in a revolutionary state depends on other factors such as actions by regulators and markets. In a review of Vacliv Smil’s most recent book, Bill Gates writes:
“The main disagreement I have with Smil is about how quickly we can make the transition to clean energy. He is absolutely right that Moore’s Law and the speedy advances in software have misled people into thinking all innovation and adoption happens that quickly. Yet I am more optimistic than he is about the prospects of speeding up the process when it comes to clean energy.”
Clearly the speed of transition to new electric supply sources will be a critical area for all in the energy industry to observe.
Do you have a workgroup that needs to become more familiar with details of the emerging Advanced Grid? Enerdynamics’ The Advanced Grid one-day live seminar provides a thorough overview of changing grid technologies and design practices, and how they are affecting the future of consumers and energy companies. To learn more, visit our website, e-mail us at info@enerdynamics.com or call us as 866-765-5432 x700.
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