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A New Energy Era?

A new political Administration may be moving in, but a monumental new era is already upon us.

The faithful made their annual pilgrimage to DistribuTECH about two weeks ago. This event brings together experts and interested parties from all over the world with a common interest in tried and new technologies for improving our electric transmission and distribution infrastructure and connected resources, ranging from utility supply to industrial and commercial uses and residential applications. More than a few industry analysts and certainly some DistribuTECH participants shared concerns leading up to and during the conference about how a new U.S. Administration might affect grid modernization and advancement. Any concern that the new Administration will significantly alter the dramatic evolution of our power industry is the wrong bet in this writer’s opinion. This is not a political position. Rather it is a testament to the value, support for and momentum of the changes currently underway in the electric sector.

The concern that the industry’s evolution might get derailed apparently stems from rumors that the new Administration may reduce funding for clean energy or potentially even eliminate DOE’s Office of Electricity and Office of Energy Efficiency and Renewable Energy (EERE). We don’t all recognize EERE, but we do know the National Renewable Energy Laboratory (NREL) which is in that office. Both EERE and NREL are heavily involved in smart grid/grid integration and cybersecurity projects these days.

Anyone who has worked with or for a large organization knows the kind of fear-mongering that goes on when there is a major change at the top. Buying into the rumor mill will just make one crazy or at the very least ineffective. Coming at the Administration change in a more pragmatic way, we recognize that when organizations change management it is reasonable to expect programs and budgets will be reviewed for their merits. We already know an infrastructure priority list compiled by the Trump Administration and shared with the National Governor’s Association includes seven major electric infrastructure projects including major transmission lines designed to transport renewable energy from source to load centers. The list also included major gas transportation, wind and hydroelectric projects. Further, we know that the new Administration has said cybersecurity would be a priority. These indications provide strong counter-arguments to the concern that the new Administration will eliminate R&D and funding important to the utility industry.

So what is at risk in this new era? Some might suggest that it is any program driven by a federal regulatory agenda for reduced emissions. A cogent response to this is that many states have set renewable standards in an effort to reduce carbon emissions and achieve other objectives. These regulations are frequently more ambitious than federal requirements, including the Clean Power Plan, which some say will not be finalized under the new Administration. Either way, state renewable portfolio standards and emission reduction programs will continue to drive new investment in small and large scale renewables and distributed energy resources as they have for a number of years. It is also worth noting that the wind and solar industries have seen record investment each year for at least the last three years. In 2016, the American Wind Energy Association reported that $128 Billion has been invested in wind projects in the last ten years. In 2015 alone, $22 Billion was spent on utility scale solar and wind projects. Finally, the tax benefits for renewable energy projects were recently extended and can be preserved for several years under current regulations. Large scale renewables are not presently at risk.

So is it distributed energy resources, demand management and energy efficiency, the types of technologies supported by EERE that are at risk? One should conclude it is unlikely. Again, we can look to the state level and see that many states are driving programs in these areas. California, New York, Hawaii and several others are leaders, but the motivation does not stop with state laws or policies. Improved technology, lower costs, connectivity, grid intelligence, cybersecurity, more storage options and demand for greater reliability and resiliency all are contributing to greater customer demand for the above options and greater choice. These technologies have largely evolved from a research to a market driven mode. The horse is out of the barn as they say.

A new political Administration may be moving in, but a monumental new era is already upon us: We are undergoing a digitally driven, modernization revolution in the energy sector. Strap in because it is just getting underway and it is unstoppable.

 

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