New technology and the US electric power industry
November 2016 | SPECIAL REPORT: ENERGY & NATURAL RESOURCES
Financier Worldwide Magazine
Given the rapid pace of advancements in technology, Americans are using electricity in more ways than ever before. And every day, the men and women of the electric power industry are working to deliver the safe, reliable, affordable and clean energy that drives our economy and powers America.
Today, a profound transformation is underway across the nation; electricity consumers know that the way energy is used and produced is changing. Most important, they expect the industry to deliver the energy future they want, in ways that do not jeopardise reliability and affordability.
In this transformation, the focus is on providing clean energy, building smarter energy infrastructure and creating the energy solutions consumers want. To do this successfully, we need to get energy policies right.
The industry has always relied on a variety of resources to generate electricity. A balanced energy mix that combines clean and renewable energy sources with traditional ones is critical to ensuring that electricity remains safe, reliable and affordable.
We also know that consumers are interested in cleaner generation to benefit the environment. The industry is, and has been, taking meaningful actions to move America toward a low-carbon energy future. The facts demonstrate the progress the industry is making.
Firstly, the energy mix is cleaner. In just 10 years, the mix of sources used to generate electricity in the US has changed dramatically. Today, one-third of US electricity comes from zero-emissions sources (namely nuclear and renewables) that help reduce environmental impact.
Secondly, the use of renewable energy sources to generate electricity is projected to almost quadruple between 2010 and 2040. As leaders in renewables, electric companies provide virtually all of the wind, geothermal and hydropower in the country. The industry has installed about 60 percent of all US solar capacity, with the ultimate goal of bringing the benefits of cost-effective solar to all US communities.
The industry also is reducing emissions. Whether it is by increasing the use of renewables, improving energy efficiency, or using cleaner fuels and technologies, US electric companies are intensifying efforts that, so far, have reduced carbon dioxide emissions nearly 21 percent below 2005 levels, as of the end of 2015. In addition, between 1990 and 2015, emissions of nitrogen oxides were cut by 79 percent and sulfur dioxide emissions by 86 percent, during a period when electricity use grew by 36 percent.
Smarter energy infrastructure
As we think about our energy future, we must recognise the value that the energy grid delivers. As the backbone of the system, the grid efficiently delivers reliable and safe energy, so consumers always get the power they need, whenever they need it.
The continued deployment of digital smart meters – with more than 65 million installed in US households to date – is one key building block of a more dynamic and more secure energy grid. Investments that hasten the integration of new technologies, such as small-scale wind and solar, energy storage, microgrids and other devices in our homes and businesses, are another. The industry is projected to invest $52.8bn in 2016 to enhance the energy grid and to further enhance grid security efforts.
Protecting the energy grid is the industry’s top priority. Every day, the industry is working to improve grid security, reliability and resiliency. Security strategies are constantly evolving and are closely coordinated with government partners. By working together, industry and government greatly enhance response and recovery efforts following a major storm, as well as the ability to defend and protect against cyber and physical security threats.
Energy solutions consumers want
Consumers today want more flexibility and want to be more engaged with their energy use. Electric companies are changing the way they provide services to consumers and individualising those services – for large consumers, like data centres and major corporations, that want to use renewable energy; for residential consumers who want to manage their energy use with connected devices and through web-based platforms; and for major cities that want to be more sustainable and reduce their carbon footprint.
The industry also helps consumers save energy. It invested $7.3bn in energy efficiency programmes in 2014. These investments avoided the generation of 107 million metric tons of carbon dioxide and saved enough electricity to power 14.7 million US homes for one year.
And, the industry continues to promote electrification in both on-road and off-road applications to support environmental goals, build customer satisfaction and enhance national security by using more domestic energy resources.
Last year, the industry further bolstered these efforts by launching a partnership with the Department of Energy that is identifying and pursuing collaborative opportunities between the government and the industry to promote and accelerate the nationwide adoption of electric vehicles.
Getting the policies right
One energy technology that consumers are increasingly interested in is rooftop or private solar systems. Private solar offers an attractive option for some consumers, and electric companies are actively examining ways in which these systems can be better integrated into the energy grid to enhance reliability, improve resiliency, reduce costs to consumers and to the grid, and improve the environment.
Policymakers across the country are encouraged to update current policies to ensure that everyone who uses the energy grid continues to share equitably in the costs of paying for the grid.
To ensure that electric companies can deliver the energy future consumers want and expect, it is critical that traditional generating sources work hand-in-hand with clean and renewable technologies, that a diverse energy mix is maintained, and that new technologies complement one another, instead of competing against each other.
At the end of the day, the more than one million Americans directly or indirectly employed by the electric power industry are committed to delivering safe, reliable, affordable and clean energy – and to using new technologies and leading change that maximises value to consumers.
David Owens is executive vice president, business operations group and regulatory affairs, at the Edison Electric Institute.
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Edison Electric Institute