Saturday, January 20, 2018

It’s Time for Electric Companies to Pivot

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Renewable energy is rapidly changing the electric grid, and utilities need to adapt or face still greater disruption in their industry, according to a new report.  Two directions now appear likely to offer opportunities for growth, the report says.

One is to move toward electric infrastructure as a platform for new applications that other companies can develop, such as renewable energy storage.  The other direction is for the utility itself to expand into new growth areas like electric vehicle charging stations.

Either way, says report co-author Dan Cross-Call of the Rocky Mountain Institute, utilities that sit back and continue with business as usual could fall behind.  Traditional utility growth models, he says, are not future-proof.  “Demand for electricity has become flat or declining in many places,” he says.  “So the historical expectation that sales increase is no longer the case.”

Cross-Call says renewables such as solar photovoltaics—whose explosive growth has put it 40 years ahead of the U.S. Energy Information Administration’s forecasts from earlier this century—continue to eat into the old centrally-generated electric utility business model.  Meanwhile, the efficiencies of LED lighting and other improvements have reduced demand for electricity in the U.S. compared to the age of the incandescent bulb.

The good news for utilities, he says, is a number of innovative players have already shown the way.  For instance, Cross-Call lauds the Vermont utility Green Mountain Power (which IEEE Spectrum profiled in 2014) as “one of the most innovative utilities in the U.S.”  He says Green Mountain represents a hybrid approach, offering both platform development and some expanded offerings as well.

On the latter front, for instance, Green Mountain Power offers home energy audits and efficiency consulting as part of its services.  And as a platform developer, they’ve partnered with Tesla to promote and install Tesla Powerwall and Powerpack batteries for home energy storage.

Read more at It’s Time for Electric Companies to Pivot

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