"Reports of my death have been highly exaggerated."-- Mark Twain
Some commentators in our industry, noting that a utility customer buys less of their utility’s product when they install rooftop PV, or when they participate in a Demand Response (DR) program event, have described this trend as a death spiral (e.g. see this GTM piece “the utility death spiral”).
In reaction to this trend, the title of an article in Forbes last year told the story well: “Disruption Derailed: The Utility Death Spiral Myth,” provided a good example of the errors that ensue when we try to apply theories from the IT world to non-IT related aspects of the utility industry. ("Disruption Theory" is closely related to the topic of our last IdeaXchange: "A Smart Grid Chasm-Crossing Dilemma")
As the article’s author, William Pentland, pointed out, the death spiral prediction “was more than just ‘wrong’ – it was wildly, spectacularly wrong.”
Going forward, as we look at key trends, we will seek to size things up the way that a good engineering- and market-strategy oriented accountant-philosopher-economist would size them up. What is “real” and what is “hype,” and why should you care about one trend versus another?
What would a balanced, decade-by-decade look back and forward suggest, when we size up segments our energy and electricity marketplaces that may currently be relatively small but are growing relatively quickly? How does near-term hype stack up against the decade-by-decade realities of how our industry installs and manages assets, and evolves?
This is the type of stance we will take, whether trends involve microgrids, storage, integration of wind and solar, growth in the use of electric vehicles, or increasing the dispatchability of demand response and other intermittent energy resources, or advanced distribution management systems, or mobile-enablement of work management solutions, or optimization of the use of real-time data, analytics, and big data, and related IT solutions, and on and on.
Our industry has accomplished tremendous things, and changed things in big ways, ways in which we do not always give it credit. And we have gotten very good at doing the things we were mandated to get good at. But the corollary is true too. We have not “gotten good” at things we have not been mandated to get good at. For example, U.S. Investor-Owned Utilities, from 1936 until relatively recently, have been barred from selling products or services on the customer’s side of the meter, a sort of branding in relative silence that numerous current utility marketing efforts are seeking to shift.