- Created on 23 July 2015
- Written by Don McDonnell
We all face dilemmas in life. Last month, I spent two full days in Washington, D.C. addressing a trilemma: how does our electric power industry balance the sometimes conflicting, yet equally vital, goals of ensuring that our electricity becomes more affordable, reliable, and clean? This "energy trilemma" framed two days of engaging and spirited discussions among industry and policy leaders at the 8th Utility of the Future Leadership Forum (UofF) hosted by DNV GL.
In his opening remarks, Rich Barnes of DNV GL issued a challenge: "Achieving all three elements of the energy trilemma won't be easy. However, this industry has met the challenge of change throughout its history, and I'm confident it will continue to do so."
Since I first attended and blogged about the UofF Leadership Forum several years ago, I have come to really appreciate the importance of the "theater of ideas" at these types of gatherings. Great theater requires great characters, and this year's UofF certainly did not disappoint. The Forum's advisory board does a good job each year bringing in speakers with widely divergent views and perspectives: republicans and democrats; regulators and suppliers; utilities and advocates. In this blog, I'll reflect on the "energy trilemma" perspectives of three guest speakers: Maine's Senator Angus King, California entrepreneur Bob Powell, and Georgia Public Service Commissioner (PSC) Tim Echols.
|Senator Angus King (I –ME), who spoke mostly extemporaneously with healthy dollops of political humor, reflected his beliefs forged by a wide-ranging career in politics and business. He struck me as a fitting representative of Maine and its motto, Dirigo, meaning, "I lead." I didn't know much about King before UofF and was excited to hear his background in energy. King shared elements of his Free Market Energy Act of 2015, legislation he had proposed just a couple of weeks earlier in May. While on its face, the act holds some potentially dislocating elements for those running traditional integrated utility businesses, King also reflected awareness of current utility business models and the fact that change will, by necessity, come through an evolution not a revolution.|
King said, "We are on the verge of a significant shift, driven as all of these kinds of disruptive changes are, by technology and economics. It won't make the grid obsolete, but it will make it different." At the heart of King's philosophy is his belief in the need for a focused and organized evolution in utility business models to better embrace distributed energy resources in all forms, particularly from solar power and a growing class of energy "prosumers." King knows a thing or two about energy prosumers from his days leading companies in the cogeneration space. I found his address to be not only entertaining but well informed. He closed with a message clearly directed at the utility industry "old timers" in the crowd. (I freely admit I can be fairly lumped in with that group.) King quoted an 1862 Abraham Lincoln address to congress: "As our case is new, so we must think anew, and act anew. We must disenthrall ourselves, and then we shall save our country." King called for the industry to "disenthrall" itself from the status quo, noting, "We must disenthrall ourselves. That means think differently about the way things have always been."
|While there were a host of other great speakers the first day, Bob Powell, an energy and technology entrepreneur and one of the founders of a company called Correlate, stood out for me. He was previously the North American divisional president of Sun Edison. Powell's remarks reflected more of a revolutionary approach to addressing the energy trilemma than King's more pragmatic and politically grounded evolutionary tone. Powell framed his perspective early in his address, "I guess my question to you would be, what would you think if I told you we are in the middle of a revolution in our industry that will have an impact very much like the industrial revolution did?"|
Powell centered much of his discussion on the energy efficiency opportunities available across the value chain. Admittedly, he hit my soft spot with this focus; I agree with him completely on the tremendous potential to address our trilemma with a continued and persistent focus on efficiency. Bringing in the "creative destruction" argument made for an entertaining and provocative presentation. In some ways, his talk reflected something of a "West Coast" approach to the utility industry's transformation. He cited the experiences of Airbnb and Elon Musk, for example. While Powell clearly knows the utility industry, in some ways Silicon Valley comparisons can overlook the complex realities faced by 3,000 plus utilities spread across hundreds of state, federal and local jurisdictions. Powell closed by drawing analogies between traditional utility business models and the need for regulators to "cut through them like a Gordian knot." His presentation was insightful, well informed and definitely thought provoking.
Day two brought more spirited conversations. While perhaps I am somewhat biased as a Georgia resident, one of the highlights of the second day was the participation of elected Georgia PSC Tim Echols. Echols did not miss the opportunity to talk about the success of efforts to evolve Georgia's energy infrastructure and systems. He shared his view of the inherent challenges and the risks of unbalancing the energy trilemma as they relate to costs issues and the EPA's Clean Power Plan. Echols also made clear his view that nuclear must be part of the future solution. He got one of the biggest laughs of the event during this exchange:
Echols: "You know, I think our state has done it the patriotic way, right? So with no RPS, we are the fastest growing solar state in the U.S. We are number seven, no subsidy. Right? We have more Nissan Leaf's than any other state in the union. We are the second largest EV market."
Panel moderator DNV GL's Olof Bystrom: "So it sounds like you are going to be soon switching sides in Georgia on the support of carbon control. Is that what I'm hearing?"
Echol's [deadpan]: "Nope."
The debate was civil and the discussions were spirited, and this year's event again proved to be another important opportunity for leaders to drive our industry toward a balanced energy future. A wealth of related resources from UofF 2015 can be found at: The Utility of the Future Knowledge Hub.