Several powerful forces have combined to create one of the electric utility industry’s most complex challenges: responding to the rapidly growing societal mandate for action
y efficiency. e mandate comes from the consumer. Consumers e concerned with the environment and sustainability,
security and energy independence. They expect eliability performance—from an aging grid that was for a previous generation of end-use applications. want more control over rising electric costs and mental impact, and the lower bills that could result er or decreased use. their part, utilities know that energy efficiency address a variety of their concerns such as carbon on, asset-based growth and infrastructure renewal. a of rising commodity costs and right-of-way and restriction, energy efficiency also presents the utility with a way to improve asset utilization. Energy efficiency can create incremental capacity, energy and ancillary resources,
particularly as new fossil generation faces higher costs and permitting risk. Energy efficiency presents an opportunity to upgrade information and telecommunications technology to enable programs and system controls, and economic development and retention through reliability and customized programs. Importantly, energy efficiency can also generate regulatory and community support for eventual rate increases for core operations.
During the past few years, we’ve noticed a shift in tone from the executives we’ve spoken with about energy efficiency. They’ve rapidly gone from “What’s the potential?” to “Show me who’s doing it,” and now, “How do we get started?”
News of successful pilots utilizing existing and emerging technologies comes out on a weekly basis. Legislative “innovation” also continues on a state and federal basis in response to societal and political pressure and of course, the 2008 election cycle.
In particular, the sense of urgency is highest when addressing climate change concerns and when finding resources to support continued load growth at a time when prices of generation are rising quickly.
With this level of support, why is making energy efficiency work a challenge at all?
For one thing, in most cases this is still a concept in its infancy. It doesn’t even have a consistent name. Energy efficiency is referred to as either part of, or interchangeably with, the “Delivery System of the Future,” demand-side management, the Smart Grid, Dynamic Energy Response,
Author
Robert Zabors is a partner with Bridge Strategy Group, an experience-led general management consul-tancy committed to helping clients rapidly improve their business performance. For more information, visit www. bridgestrategy.com.
by Robert Zabors
and other names. Nobody has the complete answer, although the pieces are falling in place.
For another, one size will not fit all. Implementation needs to be specific to a region and a utility because of the fragmentation of industry business models and where each company and region is relative to its installed base and applicable supply and infrastructure technology options. Some utilities own generation and some don’t, and the benefits of efficiency depend upon which supply resources are avoided (e.g., gas peakers or coal-fired baseload) and the availability of renewable options.
There there’s the issue of the capabilities of existing IT and communications systems to support data collection. Decision support functions and customer interaction depend on what each utility has in place. Existing infrastructure and design standards need to be addressed at the individual operating company level and ultimately at the circuit level.
To meet potential legislative mandates, a utility could simply file an Integrated Resource Plan, design some programs and outsource fulfillment. Hopefully the company can recover expenses. But this strategy would miss most of the potential and benefits of this rare opportunity. The full potential leads to solutions customized to the needs of customers, utility infrastructure, regulatory structure and applicable technologies.
And the toughest part: it is not a challenge the industry can solve on its own.
Why does energy efficiency deserve the status of “first fuel” relative to fossil investment?
• Favorable and variable cost profile
• Societal and community benefits
• Faster market impact on capacity needs and carbon profile
• Ability to adjust and evolve over the course of the investment cycle
What changes are needed?
Unlike traditional operational challenges, effectively capturing the potential of energy efficiency will require coordinated change along multiple dimensions, building on a base of customer support.
Programs and applications that help customers shape their usage need to be supported by infrastructure that enables communication, programs and higher levels, which requires IT and communications technologies that support the volume
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