The expansion of consciousness that is happening on the planet is having a profound effect on the power industry. There is a shift taking place that you do not read about in the newspapers due to the fact that human drama, politics, and world events overshadow much of the news in the media, but it is evident and apparent among those in the industry. A shift is happening, mirroring the same shift in consciousness that we are all experiencing.
In fact, the same words we use to describe our awakening journey have been recently finding their way into the everyday business lingo. Words such as “awakening,” “enlightenment,” “convergence,” “choice,” “sovereignty,” and “disruption” are now being peppered throughout the articles, presentations, and conversations among executives in the power industry. In fact, things have changed so much that electric utilities have moved away from the term “power” and replaced it with a more user friendly label of “energy.”
Currently, there is a convergence taking place – a collision of technology advancements, energy regulations, financial issues, and social forces that are reshaping the electric utility business model. This convergence is creating a major disruption and putting the industry at a critical tipping point that will drive either a new wave of restructuring or completely obliterate the concept of the power company.
Today the convergence of these unprecedented conditions is putting pressure on utilities to replace their old energy systems. This wave of change that has commenced is being heralded by those in the industry as the “Age of Customer Enlightenment” and the “Age of Customer Awareness.” This is no coincidence as the effects of consciousness have bled over into this modality of life and parallel experiences are occurring that mirror our own journey.
The industry is seeing a large growth in consumer choice. Since the electrification of society and the birth of the industry, utilities have been considered a monopolistic entity – utility companies provided power and the customer paid the utility bill with no questions asked. Things have since shifted in the recent years following the transition to conscious choice by conscious beings. Now, one third of the U.S. has electricity choice through use of retail energy providers, meaning they can choose where their electricity comes from and how. Aside from retail energy, consumers can choose instead to be self-generating through integration of resources like solar panels, backup generators, participating in microgrids, and adding battery storage in their homes. They can become completely energy sovereign and choose to produce their own power while injecting what energy is not used back into the power grid. Customers are shifting from being a consumer (consuming energy) to now being a prosumer (producing energy). Is this not the same thing we are noticing amongst ourselves as Shaumbra?
This increase in consumer choice has been brought about by the desire for clean energy, regulations, and decreasing costs of distributed energy resources (a.k.a DERs – they are resources that reduce customer consumption or increase customer generation such as energy efficiency and solar panels respectively). However, renewable resources such as solar and wind are less than efficient. There are reasons for why wind and solar energy has not taken off with the gusto that most pro-environmentalists want. Their higher costs toof implementation are competing with low natural gas prices resulting in gas generation being more economical. It is also due to the fact that these are intermittent resources dependent on the sun shining or the wind blowing. Capacity factors are calculated as power generated divided by rated peak power. For solar capacity the factors are roughly twenty percent, meaning only 20% of the total rated capacity is realized. And in winter (at least in the southeast US) it has almost no capacity value due to the fact that winter peak demand occurs before the sun comes up and after the sun sets. Since the sun is not available at these peak winter times, there will be no generation to serve demand and some other form of electricity or storage is needed. Wind capacity factors for the US average around 30-40% and require a high capital cost to build. Solar farms (utility scale solar) also require clear cutting large amounts of land, roughly 8 acres per 1 MW of power (wind farms ~85 acres/MW). So for a 30,000 MW system in the southeast US to be replaced entirely with utility scale solar, it would require cutting down the equivalent of three Smoky Mountain National Parks or 2.4 million acres of land. Not to mention, large solar farms can be a danger to animals (~3,500 birds killed/burned at California’s Ivanpah solar farm in its first year of operation for a small amount of capacity). How is that environmentally sound? These resources will actually not be the downfall of the power industry in the coming years like everyone thinks unless costs come down even further and storage is made available and affordable. These resources are just distractions for what is coming much like CDs were a temporary distraction in between analog tapes and digital streaming mp3s. They are just a temporary solution or distraction on the way to sovereignty. What most likely will be the downfall of the industry will be impacts of the digital technology revolution. Technology advancements will surpass solar and wind generation to provide something else, something more reliable, less environmentally impactful, and more efficient.
The biggest factor adding to the breaking point or convergence point for the power industry is the technological innovation that has happened in the past few years. The tipping point is occurring in 2016 and will continue into 2017 with impacts increasing exponentially over the next 10-15 years.
Digitalization has caused a technological and data rich revolution, and has caused technology to actually fuel its own growth. We have seen the spawn of smart devices, smart appliances, the “internet of things” that allow you to control energy usage in your home from devices such as your phone, and these things promote you to become more energy efficient, to reduce the carbon footprint, and to have more control of your power bill. Thanks to sensors and cloud computing we are now in the era of what’s called “Big Data.” The world produces 2.5 quintillion bytes of data per day, so much so that 90% of the world’s data has been produced in the last two years. Can you imagine where we will be in another two years? Businesses that are successful are taking advantage of that – being able to have access to that data, analyze it, and use it in a way that benefits them. That data will then help businesses understand their customer or stakeholder behavior. Google, Facebook, and Amazon are good examples of this. From a person’s internet searches and previous purchases, that information is used to tell you what you need to buy before you even realize you need it. And they are usually right.
3D printers have a potential to change the industry even further. Restaurants have popped up across Europe that utilize 3D printing to print meals. If 3D printing takes over food preparation, the need for other appliances used for cooking may become obsolete as a result. There will be no more need for refrigerators, microwaves, stoves, and ovens. They would become as obsolete as the VCR or cassette tape. The lack of these devices would reduce energy consumption and increase energy efficiency, once again putting utilities’ livelihoods at risk. 3D printing doesn’t stop there. 3D printed buildings are already being made, and with this is the potential for printing smart buildings or self-generating buildings. This effort would support California’s initiative which is to have all new homes and buildings be “zero net energy” buildings by 2020, meaning they are producing as much as they consume. This would drive the end of the power industry. There are 3D printing potentials in the manufacturing, automotive, and medical industries, all of whom are customers of the electricity industry. Potentials with 3D printing are limitless but so are the impacts felt across industries, utilities, and financial markets.
All this innovation in technology has caused new players to emerge – such as Google, Apple, Nest, Tesla, Solar City, etc. – as competitors to utilities by providing more efficient or self-generating technologies to counter the generation coming from their old energy assets. This is something the industry has never before seen the likes of. Competition only existed within the confines of the industry itself in the past, but is now expanding out into other arenas of technology. These new competitors are growing the market and providing the impetus for consumer choice. In fact, there are so many choices for consumers that it tends to be too overwhelming for them. For example, if a person wants to purchase a simple light bulb for their home, it’s no longer simple as it was in times past. If you walk into any home store there are endless wall displays of LED, Halogen, CFL, and still a few incandescent bulbs to choose from. You can get different shapes, bases, and watts. It’s similar to the coffee conundrum. You can no longer go into a coffee shop and just order a simple coffee – there is too much to choose from. “Old coffee” no longer exists and has been replaced by the more advanced and flavorful “frappuccino-schmino-mochalatte-caramel-machiattovetti-spresso-venti.” The ability to choose is limitless, long, and alien to humans, but it is here and they are learning how to choose as they become more aware of the choices. The biggest threats to the utility industry are technology and enlightened customers.
The adoption of energy efficient measures such as improved insulation, energy efficient appliances such as heat pumps, LED lighting, air conditioning systems, and refrigeration reduce energy consumption, generation, and the need to build new power plants to serve demand. This has resulted in a decline in electricitygrowth in the US. The first two thirds of the century had high growth rates of electricity consumption; however the U.S. has seen flat consumption since the mid-2000s. Utilities are coming face to face with the “death spiral” which spreads growing fixed costs from investments over declining sales and revenue. Existing high cost capital investments from having built coal, nuclear, hydro, and gas plants to serve electricity demand have incurred a lot of debt, and with revenue losses these costs are made up by increasing customer rates to meet revenue requirements. This increase in rates drives more customers to implement solar or more efficient devices to reduce their costs. This creates an even wider separation gap among the rich and poor. Those that cannot afford to have efficient devices or to be prosumers have to carry the brunt of these lost revenue impacts by paying more on their bills while the prosumers see decreasing costs in their bills – the rich become richer while the poor become poorer. As we are already seeing division between consciously aware and unconscious individuals, we will also see a wider separation or distinction occur between those with energy choice and those without.
It is no surprise that the power industry is undergoing a shift. It is no surprise that energy generation is a mirror of consciousness and all the work and shifting that you are doing to move from a “powerless-to-energy rich” life is flowing into the world around you. In an industry where things have been barely changing at all, the gravity of this convergence is forcing the industry to react faster than ever. It is currently the moment right before the storm, where we can see it coming. Some in the industry are preparing, some are in denial, some are running around shouting end times, and some are trying to find solutions by partnering with these technological companies to try to offer new services beyond power. Then there are those who are sipping wine, sitting in their presence and watching it happen. There are indeed those who are concerned and fearful, feeling the impending death of the power business, but they don’t realize that this change is leading to something completely new, something that will allow expansion beyond these currently limited and literal “old energy” paradigms. The disruptive challenges arising from these convergence factors will transform the power industry and create a new reality, contributing to a more sovereign and en-light-ened energy future.
Tanya Mathur has been working in the energy industry for 16 years. She is currently Senior Program Manager of Business Intelligence and Enterprise Performance for the Tennessee Valley Authority, a corporate agency of the United States that provides electricity to 9 million people in seven southeastern states. She has been other things too, including but not limited to neurotic, artistic, sarcastic, tired, hungry, musical, enlightened, popular with the introverted, and ridiculous. Please direct fan mail to [email protected]