Utilities Remade
If what a new report says turns out to be true, the utility we know today would be barely recognizable in a few decades.
The 21st Century Electric Utility: Positioning for a Low-Carbon Future was written by Navigant Consulting for Ceres. Ceres is a coalition of investors, environmental groups and other public interest organizations working with companies to address sustainability.
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The report was released at a news conference Thursday.
In its simplest form, the report was captured in the simplest of statements: "We have to change the way we are working," said Tom King, president of National Grid USA.
More broadly, that means a price on carbon, greater integration of renewable energy, a vast increase in energy efficiency, all manner of smart grid applications and more. On the regulatory side, that means decoupling of electricity revenues from electricity sales, more rate-basing of renewables and energy efficiency, for starters.
"The traditional paradigm of building large fossil fuel power plants to sell ever-increasing amounts of electricity is fast becoming obsolete," said Ceres President Mindy Lubber. "New business models must include aggressive energy efficiency measures and delivery of cleaner, low-carbon energy through renewable and smart grid technologies. Realizing these changes, as a handful of utilities has begun to do, require a fundamental rethinking of how we produce, transmit and use electricity in the U.S."
When I mentioned the current political environment and the unlikely event of a price on carbon anytime soon, the authors seemed to think that only a temporary circumstance.
The upshot: Whether there's a price on carbon this year, next year or in a few years, some utilities and many other businesses are acting now as if one in the future is a foregone conclusion.
State mandates for clean energy is the key driver, especially if they were to become "enforceable." They are the most popular renewable program now, absent a federal policy, but carbon regulation is the linchpin.
"If there was a carbon tax it would help to drive continued development of renewable energy," said Lisa Frantzis, of Navigant's energy practice and the report's co-author.
Slow deployment would continue, but as we've seen before, policies with long lead times are truly slow to gain momentum.
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Comments
ENDING ECONOMIC EXPANSION
The "traditional paradigm" is being FORCED to obsolence. Concurrently, the renewable MANDATE means less electrical capacity from which to draw and much higher prices on both existing and new capacity. All of this will drive manufacturing out of the US....which may actually be the goal of Greensters everywhere. Environmentalism intersected anti-capitalism a very long time ago and these co-dependent twins are now coming into full bloom....damn the consequences.
carbon taxes
"'If there was a carbon tax it would help to drive continued development of renewable energy'...". That pretty much tells the story about the push to renewables. And just who will eventually pay that tax? It is going to get pushed down to the consumer.
If we (the American people) want to fund renewable energy, let us decide. We can vote to do so by selecting the option to pay a bit more on our electricity bills for renewable energy. The only thing required to be monitored is that these extra funds go to the right places.
Right now, the federal government is giving out grants each worth hundreds of millions of dollars to fund carbon capture and sequestration projects. And, the American people do not have any say in this. This technology decreases significantly and drastically the efficiency of the plant to which it is applied. If the captured CO2 is being used in an economical way to produce useful products then CCS might have a beneficial outcome (enhanced oil recovery, chemical conversion, etc) then it makes sense to do it. But Nature already has a way to convert it back to carbon and oxygen. If the CO2 is simply going to be stuck in the ground, then the true purpose of CCS is to make fossil-fuel produced electricity more expensive by requiring more fuel be burned for each net MW to the grid which will increase the amount of carbon taxes paid.
When the electric bills keep going up, the people who never had a job, or have a very low paying job because they never bothered to complete the taxpayer funded education they were offered, will not be able to pay their electricity bills from the government assistance payments (funded by taxpayers), so some of the money from the carbon tax will be used to pay their bills. The process is called redistribution of wealth, aka socialism.