Utilities of the future

Utilities of the future

Coal now provides 66 percent of electricity in Colorado. How about 20 years from now?

No shocker here: All four speakers at an environmental forum held in Denver recently agreed that coal will recede, although they differed greatly in their predictions: from a high of 40 percent to a low of just 5 percent of total generation.

And as for solar? For all the panels you see, it generates just 0.3 percent of Colorados electricity right now. But even the most conservative estimate envisioned 7 percent by 2034. One speaker optimistically predicted a full 25 percent of generation.

Whats holding things back? In wind, not much. The giant farms of the Great Plains are delivering generation for  $28 to $30 per new megawatt hour capacity. That compares to $45 to $46 per megawatt for fossil fuels, according to Tom Plant, one of the speakers.

But more important than the precise energy mix may be the new business model that must necessarily emerge.

Its not a question of if it will happen, but a question of when it will happen, said Bob Lachenmayer, Denver-based smart city manager for Schneider Electric, an international energy-management company.

In the first half of the 20th century, the business model that took shape relied upon central production such as from giant coal-fired power plants. Utilities, whether privately owned or public, earned revenues in a straight-forward transaction based on the amount of electricity sold. This business model holds no inherent place for efficiency in use of electricity by customers and tends to discourage small-scale local production unless specific measures, such as rebates and net-metering, are ordered.

Now, were seeing calls for local production, what is called distributed generation, a more sophisticated electrical grid that allows greater communication between supply and demand, and, of course, a shift away from fossil fuels, especially coal, in favor of more integration of renewables.

All these themes were discussed in the Dec. 2 presentation sponsored by the Alliance Center, the building in Denvers LoDo district that is home to many of Colorados environmental organizations.

Jerry Marizza, new energy program coordinator for Brighton-based United Power, one of Colorados 34 electrical cooperatives, was most cautious in predicting change. Even so, he sees transformation. The existing grid can accommodate up to 30 percent renewable energy, but beyond that more changes are needed: a smarter grid, improved storage, and larger amounts of distributed generation.

He also said that utilities are in the best position to solve the energy puzzle and that utilities should be treated like businesses. He did not explain what he meant by that.

Plant, a former state legislator who is now affiliated with the Center for the New Energy Economy at Colorado State University, continued the theme but added that the regulatory environment needs to be adjusted if utilities are to do what we want them to do.

Utilities, he went on to say, need a new business model. We cant ask utilities to do what is contrary to their business model.

Plant, who also ran the Colorado Energy Office for several years, then held up a smart phone and spoke about the many applications developed for their use. The smartphone creators dont necessarily create the aps, he said. They only create the platform.

Utilities need to be seen in a comparable way, he said. They will provide the platform, but others will figure things out about how we produce and consume electricity.

Source: Mountain Town News

SMART GRID Bulletin July 2017


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