Utilities

<p>The electric utility industry is undergoing dramatic, multi-dimensional change. Consider these new dimensions of the electric utility industry.</p><p><strong>&ldquo;D&rdquo;eterioration</strong></p><p>The aging, monolithic, centralized, carbon intensive, cost-plus monopoly electric grid is deteriorating in many ways. Reliability is declining, costs are increasing and grid operations are becoming more complex. Even if these deficiencies were not occurring, the legacy electric utility business model is being disrupted from without and within.</p><p><strong>"D"ecarbonization</strong></p><p>The growing demand for sustainability from customers, regulators and the general public continues. Furthermore, even if that weren&rsquo;t the case, economics increasingly favour sustainable energy resources, both physical and virtual, which can meet customer demands not only more sustainably but actually more economically than traditional electric utility generation.</p><p><strong>"D"ecentralization</strong></p><p>The legacy bulk electric system, a monolithic network of central station generation connected via high voltage transmission lines to load centers is being increasingly displaced by real and virtual energy sources on the distribution lines, even on the demand side of the meter.</p><p><strong>"D"istributed&nbsp;energy resources</strong></p><p>Distributed energy resources (DERs) are proliferating at an accelerating rate on electric distribution networks. They include actual electric energy production and controllable electric energy consumption (i.e. virtual generation). They are increasingly being deployed on the customer&rsquo;s side of the meter. DERs can include solar PV panels, wind generators, combined heat and power (CHP) generation plants and conventional generation. DERs also include electric vehicles and other controllable electric loads, such as HVAC systems and electric water heaters. They can also include conservation and energy efficiency measures which have virtually the same effect on the grid as adding a comparable amount of distributed generation capacity. These resources are typically smaller in scale, much more numerous and more widely distributed on the grid than traditional electric utility generation facilities</p><p><strong>"D"igitalization</strong></p><p>Welcome to Industry 4.0! The diversity, multitude and complexity of DERs dictate real time monitoring, analysis and control. At the same time, the Industrial Internet of Thins (IIoT) provides a ubiquitous telecommunication, analytic and control platform. Electric utilities will be operating both electrical networks and digital telecommunications networks. These will ultimately converge into cyber-physical systems.</p><p><strong>"D"isintermediation</strong></p><p>Most, if not all, DERs can be sold by or owned and operated by non-utility entities. Think about getting rooftop solar arrays from Tesla or having controllable loads managed by Apple or receiving a renewable energy credit from Alibaba or monitoring and management of electric energy supply and consumption by Microsoft or an electric vehicle being charged by Tesla no matter where it is or almost any manner of DERs available from Amazon.</p><p><strong>"De facto "D"eregulation</strong></p><p>All these developments represent a foundational departure from the incumbent bulk electric system being operated by regulated cost-plus monopolies. The industry is moving to a more openly competitive electric energy market. Consumers will be able to pick and choose both real and virtual electric energy service providers. This is deregulation from the bottom up.</p><p>Welcome to a 7"D" world! And consider that the daunting challenges are outweighed only by the potential benefits of an emerging smart, resilient, economical and sustainable electric grid.</p>