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2020 Energy Forecast: What you Need to Know

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Matt Duesterberg's picture
CRO, OhmConnect

Matt co-founded OhmConnect in 2014 and is currently the company’s CRO.Prior to OhmConnect, Matt ran the data science division at DataRaker, which was acquired by Oracle in 2013. He started his...

  • Member since 2020
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  • Feb 7, 2020

This item is part of the Predictions & Trends for 2020 SPECIAL ISSUE, click here for more

The power behind the changing industry. Energy Expert Matt Duesterberg, co-founder and CRO of OhmConnect, the leading clean energy program, dives into his 2020 energy predictions.

1. Data  

Data is the lynchpin of a competitive market. Incumbents such as regulated utilities have an information asymmetry that begets their monopoly power. Many incumbents hoard the data, claiming that they are the only ones who can make the right decisions. In many cases, it is a self fulfilling prophecy, because they are the only ones that have that data. Some incumbents, such as Southern Company, take it even further - they won’t even let their users see their own electricity consumption data. Imagine Visa sending you a credit card bill for $1000 without letting you see what transactions were made.  

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Texas has proven what a competitive market could look like by allowing consumers to grant third parties to access their data. In 2020, data will be in the forefront of the conversation on two major markets - California and New York. In California, there is a big open ended question about the role of utilities, given the wildfires, public power shutoffs, and the changing grid. Data will play a key role to wrestling power away from the three main utilities and into the hands of other third parties. In New York, smart meters are in the process of rolling out. The utilities want to hold onto that data but the regulators are fighting for equitable rights to that data.  

2. Decentralization 

Threats of cybersecurity and wildfires and the opportunity of localized generation and storage of power will make decentralization a key point in 2020. The wildfires in California have highlighted the brittleness of the grid. It wasn’t the fires that did it but the subsequent power shutoffs that did. Most of California had their power turned off because of wildfire risk. This shows that a single point of failure doesn’t work – the potential for a spark to jump to a nearby tree led to millions of people without power. At the exact same time, companies like Tesla, LG, Sonnen and SunRun are coming out with product offerings that guarantee you won’t be out of power - through sun, rain, darkness, or even a cybersecurity threat - you will have power. And after a couple of days without power, that value is moving to the top of consumer’s minds.  

3. Reliability 

In the same way that decentralization will hit the forefront for end users, this increasing amount of distributed, non-market, controllable resources creates an even bigger nightmare for the grid operators driving the grid. To date, the grid operators have had the ability to turn on and off carbon intensive resources to match demand. As more of the energy generation moves to non renewables, the grid operators are faced with driving a grid without the ability to balance it. Imagine if you were driving a car and the breaks go out on you. That is what is happening to the grid and California is a good example on where it breaks. We have had days when we have to turn off solar power plants. We have had days in which we have had to ramp up 13 GW of power in 3 hours. The grid operators are trying to deliver you power when you turn on the light, regardless if the wind is blowing or the sun is shining. There are currently three ways to do that: 

  1. Renewables instead of natural gas peaker plants (CA has banned production of new peaker plants)
  2. Storage, which is very expensive but it’s being deployed as quickly as possible; and
  3. Entities like OhmConnect who are doing smart balancing of the grid by just changing your AC, refrigerator, etc., to smart devices and plugs. 

4. Electrification of Homes 

This topic will hit national discussion in 2020. In 2019, barely anyone had heard about this; not even in the cities that will be affected by it. Yet, quietly in pockets of California and across the nation, over 20 cities adopted all-electric standards for buildings.  

What is electrification? It is a war against natural gas. To get to 100% carbon-free energy, the state must remove all carbon-based resources, including what you are burning in your home. That means your stove, hot water heater, and HVAC will be electric. You cannot get a gas grill anymore. Those in the gas industry find this preposterous - how can it be better for the environment to burn gas into electricity, transmit that electricity across wires to your home, and then convert electricity to heating your home or cooking your food? The answer is that in the long term, these areas will not burn gas into electricity. Electricity will only come from renewable sources like solar and wind.  

Proponents of electrification have two strong points that move this idea beyond the environmentalist’s dreams:

  1. If you put an air quality meter next to your gas stove you’ll be stunned to learn how terrible it actually is. Natural gas now is where the tobacco industry was 20-30 years ago. Data is just starting to come out on the harmful effects and once people start to hear about it, it will become a cultural stigma. And, when people catch on, the transition towards a decarbonized, electrified energy grid will result in cleaner energy use. 
  2. A full conversion to electricity means that you can remove the infrastructure around an entire utility. Imagine getting rid of all of the infrastructure around gas pipelines, gas safety equipment, gas pipes in your house, etc. Large cost savings can occur from the simplification of that. 
Matt Chester's picture
Matt Chester on Feb 7, 2020

It's interesting that you highlight data transparency of utilities sharing with customers and third parties the data, when I think you often hear about problems within utilities coming from data being collected, siloed, and not accessed from within. I know a hope is that those walls within a utility would come down-- do you think that would happen in conjunction with sharing with third parties, or will utilities who are finally tapping into their data themselves still be protective of that information?

Matt Duesterberg's picture
Matt Duesterberg on Feb 17, 2020

Great question, Matt.

Short answer is yes - as the data walls between third parties and utilities become standardized, the access across utility groups will be better. The challenge lies in having standardized protocols to access data, not the permissions to access the data. 

Many industries have dealt with the data proliferation problem that the utilities can learn from. Having a single source of record with sophisticated access protocols is much better than having many copies of data across organizations. However, it is much easier to implement many copies of data than it is to implement a sophisticated access protocol. As a result, many utilities choose to have many copies of the data, and what happens is that those copies of the data sometimes conflict, as I've seen with dozens of utilities in my career. 

My hope is that we will see a standardized data access protocol such as Green Button Connect that will be implemented by all utilities, but we will still have utilities that will be protective of their data. Complications exist in each utility such as state vs federal jurisdiction; utilities have requirements regulated both by FERC and their local regulatory authority (for example in California, the Public Utilities Commission wields significant power). 

Matt Chester's picture
Matt Chester on Feb 18, 2020

Thanks for the followup, Matt.

Many industries have dealt with the data proliferation problem that the utilities can learn from. Having a single source of record with sophisticated access protocols is much better than having many copies of data across organizations.

One of the silver linings of the utility industry being a bit slower to digital age, they can avoid learning lessons the hard way and look to those industries that have evolved before them!

Matt Duesterberg's picture
Thank Matt for the Post!
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