The U.S. electricity system is one of the great engineering achievements of the modern world. It is a highly complex system with many technical intricacies, and equally many parties involved in its safe, reliable operation. Though impressive, our electricity system and the business structures that have ably supported it up to now are proving rigid, frail, and increasingly antiquated as society and technology evolve around it.
Just last week, the Wall Street Journal reported that Federal Energy Regulatory Commission analysis found that a relatively small-scale attack on nine substations could cause a nationwide blackout, crippling our nation for weeks or months. Only two weeks earlier, Rocky Mountain Institute released The Economics of Grid Defection, a report illustrating that grid connection could become a matter of choice rather than a matter of fact for millions of customers across the U.S. within the next decade.
As new technologies emerge and their costs drop, infrastructure ages, and social and environmental priorities change, our electricity system is being stressed to evolve. Today’s reality drives us to consider climate and security threats, the likes of which our technical and business infrastructure has never faced. Further, innovations in technology, financing, and new customer capabilities are pushing an historically monopoly-based industry toward ever-more competitive dynamics.
These forces in combination are bringing the electricity industry toward a proverbial fork in the road. With substantial looming infrastructure investment needs, will we continue down a business-as-usual path that may be increasingly in conflict with emerging trends, or work to evolve a better electricity system of the future that overcomes today’s challenges while addressing tomorrow’s needs?
Rolling up our sleeves
Widespread solutions to the regulatory framework, business model, customer adoption, and other key challenges the sector faces have so far been slow to emerge for myriad reasons, among them the electricity system is impressively complex, its challenges are continuing to evolve even as stakeholders try to address them, and those stakeholders are many and have sometimes diverging and conflicting priorities.
Managing this complexity requires a unique approach to problem solving. Which is why RMI’s Electricity Innovation Lab (eLab) has been convening utilities, regulators, NGOs, technology providers, customers, and other stakeholders to address three key questions:
- How can we understand and effectively communicate the costs and benefits of distributed resources as part of the electricity system?
- How can we harmonize regulatory frameworks, pricing structures, and business models of utilities and distributed resource developers to yield the greatest benefit to customers and society as a whole?
- How can we accelerate the pace of economic distributed resource adoption?
To answer these questions effectively, eLab is using cutting-edge approaches to bring together incumbents and insurgents to look at the forces at play in the industry, create new opportunities to evolve the system, and test out new solutions on the ground. The industry needs approaches like this, and it needs them now.
With our members, eLab has already produced important results. But that is not enough. The industry also needs to rapidly accelerate the creation and adoption of solutions to catch up with and even perhaps get ahead of the pace of change. This is why, from March 31 through April 3, we are convening over 100 practitioners from across the country for eLab Accelerator: A Boot Camp for Electricity Innovation.
Teams from across the United States—communities and collaborators large and small—will be rolling up their sleeves, supported by eLab’s core team and a group of expert faculty, to make rapid and targeted progress on the trickiest issues they’re facing. These electricity system “SWAT teams” are crucial, because the most important changes and the most intractable challenges facing the electricity industry are taking place at the distribution edge, where no single stakeholder or industry group can control the outcome.
Developing and testing solutions
Each eLab Accelerator team is working together on a common problem or towards a common goal oriented around three complementary themes:
- New utility business models and regulations—Five teams coming from as far the sunny beaches of Hawaii and the snow-covered lakes of Minnesota will work to identify how utility business models, rate structures, and regulatory policies must evolve so that renewable and distributed resources can continue to be reliably and economically integrated into energy infrastructure in ways that create the most system value throughout their state or region.
- Energy Innovation Districts (e.g., net-zero communities, microgrids, smart grid demonstration projects)—Four teams are actively planning and building energy innovation districts in their communities. These teams, among them Arizona State University and Spokane, Washington, are faced with tough questions about how to scope and fund these developments, selecting technologies to meet desired performance objectives (such as zero emissions), and engaging stakeholders within their community to support these projects.
- Strategies that enable high percentages of renewables and distributed energy resources—Three teams are defining action-oriented strategies to transform their current energy use from dependence on central generation to highly distributed, community-oriented, renewable energy and energy efficiency.
The famous anthropologist Margaret Mead once said, “Never doubt that a small group of thoughtful, concerned citizens can change the world. Indeed, it is the only thing that ever has.” For the electricity system, accelerated change starts with small groups like Accelerator’s teams—developing, testing, and proving solutions that can then scale. We are no longer waiting for the moment where we take charge of our energy destiny; we are in the moment now. In the weeks ahead, we’ll we share more about these unique, high-potential teams, the initiatives they are driving, and the new energy reality they are creating. Stay tuned.
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