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Avoiding lazy assumptions while planning for the energy transition
- Jan 27, 2023 2:15 pm GMT
“Imagine, for a moment, that it’s the year 2050 and the energy transition is essentially complete. You live in a suburban cul-de-sac, and every vehicle you and your neighbors own is electric. Each house has rooftop solar panels, and a battery in the garage. Electricity flows in both directions — to customers, and from customers. And the last thing you want to happen, according to Alice Jackson, senior vice president and chief planning officer at Xcel Energy, is to bring your new EV home only to hear from your utility company that you can’t plug it in on certain days of the year.”
That’s how a recent UtilityDive article frames the challenges that have driven Xcel Energy to completely overhaul their planning teams. The basic premise of the article, and indeed Xcel’s reorganization, is hard to argue against. The clean energy/electrification transitions are well underway and they will change the utility industry and probably many others. How exactly the related trends mature, however, is not so clear, a fact that makes utility preparation an arduous task.
The electric future this author lays out in the opening quote is quite easy to imagine. Afterall, it basically takes our current systems of housing and transportation and imprints them onto a clean energy and electric world. The USA could certainly look like that in 30 years. But it’s also possible that the energy transitions, along with other technological innovations, change our world in more profound ways that are harder to imagine, and plan for.
While it’s important that utilities make these changes in anticipation of a more electric future, it’s worth noting that more electric cars won’t necessarily spell more electric consumption. At first, this claim sounds confused. Afterall, trading in traditional gasoline powered vehicles for electric ones will require a lot more electricity. That’s true, but our patterns of behavior become much more efficient. This is a point Stephen Baker, the co-author of Hop Skip Go: How the Mobility Revolution is Transforming our Lives (Harper Collins, 2019), made when I interviewed him three years ago for Energy Central:
“The biggest one [misconception], I’d say, is that people tend to assume that new technologies will simply follow the patterns of the old. For example, today you drive around in a gasoline-powered machine, tomorrow it will be electric, and a decade from now autonomous. But you’ll keep following the same itineraries.
This isn’t the case. In the next stage of networked mobility, transportation should be far more efficient. Most of us have cars that are only in service 5% of the time. The rest of the time they’re parked. The idea for networked (and eventually autonomous) cars is to squeeze much more production out of them, most likely as a shared resource. This could dramatically reduce our consumption of energy. Then again, if transportation is cheap and efficient, we might use it much more capriciously, perhaps sending an autonomous car across town for tacos or croissants.”
Then there’s the issue of timing. For over a decade now, many industry commentators have claimed we’ve been on the verge of a dramatic energy transition. Last I checked, however, Saudi Arabia still hasn’t diversified its economy and they haven’t gone broke, far from it. Likewise, Russia is funding its exorbitantly expensive war in Ukraine pretty much solely off gas profits. Stephen Baker also touched on the issue of timing in our interview:
“That’s the tricky part. Technology revolutions are hard to predict. The rule of thumb, though, is that they tend to arrive later than expected, and then deliver greater change than predicted. Twenty years ago, I was covering mobile technology in Europe for BusinessWeek. In my articles, I predicted that smartphones were going to transform human communication and create lots of new businesses based on geography and movement. But I had the timing wrong, and said it would happen in 2003/4. It didn’t happen until Steve Jobs unveiled the iPhone in 2007.”
Has our industries Iphone moment already happened? I’m interested to know, and if so what was it? Also, how should utilities prepare for an energy transition that is still full of so many question marks?
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