There are many ways to change and the power industry faces the proverbial fork in the road—utilities can change themselves or be forced to change by external forces. Visualize your destiny and achieve it, accept someone else's vision and change or perish altogether.
That's blatantly obvious to many of us today but, for others, it may take a decade and then it will seem prophetic in retrospect.
External forces are many-fold: they can take the form of market-based competition that catches you flat-footed and sends you into a death spiral or they can be third parties with different agendas. Of the latter, the power industry has a fair amount of experience with groups able and willing to go to court and force it to stop what it's doing, whether that's burning coal or tapping nuclear power. That route is not change—that's a hard stop. Then there are those forces that see every utility—indeed, players in every critical economic sector—as a potential partner, to be persuaded by innovative thinking, with hard science to back it up.
The latter are rare. The Colorado-based Rocky Mountain Institute (RMI) is one of them. I could digress here to warble on about this outfit's famous founder, physicist Amory Lovins, but the RMI's work is not about Lovins per se, it's about the organization's ideas and how they can be implemented for widespread benefits. It's all captured in a new book, Reinventing Fire: Bold Business Solutions for the New Energy Era.
The RMI thinks that steps to a sustainable electricity paradigm (my use of the term, not theirs)—not necessarily "the grid"—will involve efficient end-use, bolstered by distributed, often renewable resources. A secure, omnidirectional grid can facilitate a customer-based system. Fair competition between demand- and supply-side options allow customers to produce and consume electricity. Ubiquitous use of distributed renewables could power the bulk of the United States within two generations. With price and information transparency, bigger, more flexible markets will develop. Better alignment between utility and customer incentives should dovetail with societal goals, embodied in a new regulatory compact.
This extremely skeletal set of statements masks the depth of scenario planning and modeling that the RMI does to substantiate the viability of its ideas.
Perhaps it would be good to use two practical examples, so this stuff doesn't just hang in space like gossamer.
The title to a paper about how RMI has worked with Duke Energy is "Unlikely Partners," which says a lot about both sides and their willingness to work with another organization that might have been an opponent rather than an ally.
But that's the essence of what the RMI does: find willing, open-minded partners whose professed goals dovetail with its own mission to actually improve the role of electricity in society by making it more sustainable and less damaging to human and ecosystem health.
Duke's CEO Jim Rogers decided his utility—which in 2009 was the country's third largest carbon emitter—had to have a plan for the future. Working with RMI on scenario planning and modeling several of them outlined possible paths forward using all available technologies, with hurdles and risks identified. Duke is using that work in its planning processes today.
Take another example of RMI's work. Inefficient buildings may cause about 40 percent of global carbon emissions by using more fossil fuel-generated electricity than needed. That drives up real estate costs and perpetuates the damaging fossil fuel cycle. So the RMI worked with the owners of the Empire State Building—one of the world's most iconic buildings and a poster child for inefficiency in the crowded New York skyline—to bring energy efficiency's best practices to scale. RMI did the modeling and offered recommendations for a deep energy retrofit that led the building's owner to cut energy use at the Empire State Building by 35 percent.
In fact, that's the location where the RMI will celebrate its 30th anniversary on Thursday, May 10.
So even with the nation's complete failure to devise a realistic, forward-looking energy policy and the ludicrous nature of "political debate" that robs the American people of a well-conceived future, organizations such as RMI and traditional players in the economy are teaming up at ground level to move ahead.
We've touched on that trend recently in several columns, including "Utilities Race to Reach the Customer," "Power Utilities' Morphing Future" and "Utilities Facing a Distributed Generation Future." The fact is, now that the "smart grid" hype cycle is losing cachet, utilities understand they have to articulate their future business models and build systems to facilitate their ability to thrive in the face of disruption, competition and relevance. Then they can pick the technologies and systems that will support that model.
To sum up today's sermon, electricity is the lifeblood of many societal functions, including the information economy, but the RMI's core practices also include energy efficiency for the "built environment," transportation and industrial processes. Of course, they're all linked.
Examples of the RMI's work abound. It's working with Pacific Gas & Electric on the implications of high-penetration of renewables; with the state of Connecticut on future energy strategy; with the U.S. Department of Energy on new utility business models; and on an electricity innovation lab that brings stakeholders together to see how future energy scenarios might play out.
We know that the future will not look like the past. We know that the best ideas are coming from outside the power industry. We know that the old "white hat, black hat" divisions of the past don't foster constructive collaboration. We know that the citizen/customer has been awakened and likely is agnostic about whose solution wins the day.
Now with spring showers and a little sunshine, we're just waiting for minds to open.
Will all these initiatives pan out? Will all of the RMI's work prove efficacious and replicable? I'd be surprised if the answer is "yes"—that'd be a first in human history. Will many of these ideas work at scale? I'd be mighty surprised if the answer is "no."
If you're intrigued or skeptical, the links here will provide further information. If this column makes you angry, please send me your best nasty-gram and we'll run excerpts in a future column.
Intelligent Utility Daily