Customer Service

Coming soon, to a future near you

Head in the sand? Waiting for the return of the good old days? Wake up — they're not coming back, said Thomas Barnett.

It's okay — the future is so much brighter than the past, if everyone takes good care of the new technologies that are constantly evolving. Sure, ethics still matter, but no more or less than they did in previous generations. New technologies bring benefits just as much as they bring risks, as they have for every era, according to Mark Mills.

The technologies shaping our future are not all cheap, but they're poised to become more affordable. And customers will pay for convenience, points out Amy Myers Jaffe. Many customers are desensitized to the price if they can have a superior technology that makes their lives simpler.

Just think about the benefits of the tech revolution we are witnessing. Imagine a pill you can swallow that meets all of your nutritional needs while providing you with a long, healthy life. Or, getting in your car and getting to work much faster because you're not traveling on the ground — you're flying. And having genie-like Alexa to do your every bidding when you come back home. Scenarios from science fiction books and movies are coming true in a future near you.

Whether they want to accept or not, utilities are the backbone of the technological revolution. Electricity powers all of it — from smart homes to smartphones. Some utilities are already embracing it by providing consumers with apps to control their energy use and connect with their other smart devices. But there's so much more on the horizon.

It's been difficult, however, for utilities to recognize and acknowledge the changes that are coming, and to figure out how respond, according to Jaffe. Some players don't even recognize that these technologies will hit. Others perhaps see change coming, but are just really at a loss for how to respond.

Here are four separate visions for the future, each from a different vantage point.  

Amy Myers Jaffe is an energy consultant and leading expert on global energy policy, energy and sustainability, and geopolitical risk. She is the executive director for energy and sustainability at University of California, Davis. Enabling technologies are changing the future of energy, but do utilities know what's coming? At the American Public Power Association's 2017 National Conference in Orlando, Jaffe will explore the ramifications of U.S. energy independence.

Can the U.S. really become energy independent? What will it take?
I do think we can become energy independent, and we have a lot of different ways we could accomplish that. We're probably already energy independent, come to think of it. We have so many resources, whether it's natural gas, coal, or renewables — so on the power side, it's easy.

The challenge comes from our automotive industry. We have 350 million passenger cars in the U.S., and that doesn't even include the freight trucking fleet. There are some expectations that crude oil production rates in the U.S. from shale will continue to go up, especially with this new administration trying to be pro-industry with an encouraging economic and regulatory environment.

It also helps that demand has been falling — as our automobiles get more efficient, people in cities use ride-sharing, and we have new technologies. We can further prevent growth in demand through technology and policy.

There's a lot of change coming, even as there's been a lot of denying the idea that change is coming. Enabling technologies are going to move us toward the future. Utilities are finding more and more that they're having to respond to these technologies, whether customers put them in their homes or whether one state changes its regulations and now a neighboring state is interested in the same thing.

What enabling technologies are you most excited about?
I think there will be three big technologies. First, battery storage is going to be big — at some point, if it starts to look economically competitive with natural gas peaking, that could be pretty game changing. If storage projects succeed, and the costs come down, the cost of revving up and revving down plants could be contained.

The second big enabling technology will be a software system to manage your individual load — to tell you when to take from the grid, when not to take from the grid. Also, how to not have half of your building be too hot and half too cold.

The third big technology is voice activation programming at the residential level.

Will customers as prosumers influence our being able to become energy independent?
I call it the "democratization of energy." In the market, ratepayers are looking for the lowest cost solutions.

But there are other kinds of services that are interesting people. For example, it's hard to set time-of-day pricing with the traditional thermostat, which is pretty hard to reprogram. But if you could walk into your house and tell your voice-activated Amazon product, "Change the temperature of this," then people would turn their heat up and down a lot more. I'm not going to use my television in the same way, so I'm not going to use my thermostat in the same way.

As the technologies and software become available, people are going to want to use them. Those technologies are not seen through a political or partisan lens.

In Europe, they're saving two-thirds of electricity cost because they have a light bulb that actually collects light from the outside and pipes it into the interior of a building. Why wouldn't you adopt that? Why would you want to pay more for electricity?

Do customers see their utility as a go-to source for enabling technologies?
I think that people think their utility is the problem, not the solution. People think about their utility when there's a storm and service stops. And then some other business comes to the customer and says, "We can solve this problem for you by giving you this other thing."

Are the utilities going to get out ahead of these businesses or not? Some utilities are thinking there might be an advantage to adventuring with some of these technology companies, and to treating their customers as customers and not as ratepayers.

Just like the music and movie industries — a movie made by Amazon won an Academy Award this year — who you're competing with in energy is dramatically changing. Suppliers are the competition. GE has Current, and utilities have to be aware of what car companies are doing.

Do you see a future for utilities? What might their role be in this evolving scenario?
Even here in California where we keep trying to tinker at the edge of the rules, I see some utilities are unable to pivot. New players are going to siphon off some profitable new markets, and the utility is going to be left with lost sales.

Many energy companies have been slow to adapt. It's hard for me to anticipate which players are going to be able to step out and say, "My business model is not working so I'm going to a different model." It's so far proven to be difficult for the leadership in most utilities not only to recognize what changes are coming, but to grapple with how to pivot to respond to them.

Utilities think it will be business as usual because people still need to be connected to the grid. But you have all these new products coming out and all these capabilities evolving, and the grid is unable to respond.

Karl Brutsaert is director of global commercial and industrial business development at First Solar. He will be participating in a Partnerships for a Sustainable Future panel at the American Public Power Association's 2017 National Conference in Orlando. Large corporations are increasingly setting sustainability and renewable energy targets to reduce their carbon footprint. Many of these companies — big names and big job creators with large loads — are deciding where to locate their operations based on the availability of renewable energy sources. Brutsaert talked to the Association about the mechanisms and solar technologies driving those partnerships in the future.

What are some next-generation solar strategies that First Solar is seeing?
There are two big stories related to next-generation strategies in solar. First is utilities accelerating their adoption of solar, and the associated focus on technology reliability. Utility-scale solar is the fastest-growing and largest segment of solar in the U.S. Utilities are increasingly looking at how they can own and rate-base solar plants while efficiently monetizing the federal investment tax credit.

As the tax credit steps down, utility ownership will accelerate even further. For utilities that need to answer to ratepayers on asset reliability and performance, selecting a robust, reliable generating technology is critical. Utilities are specifying robust reliability standards, like the Atlas 25+, the Long-term Sequential test, and the Thresher test, in their solar solicitations.

The second next-generation solar strategy we see is corporate customers increasingly signing long-term, fixed-price renewable energy contracts to achieve sustainability goals while hedging against future price increases associated with fossil fuel-based power.

What are virtual power purchase agreements? How can municipal utilities use virtual PPAs?
Corporate customers are increasingly setting renewable energy targets, creating a major opportunity for utilities. Once a corporation has set its target, access to renewable energy becomes a factor when planning facilities. Forward-thinking utilities that enable access to renewable energy are able to not just retain customers, but even attract new customers, thereby growing load, attracting new local jobs, and justifying utility investments.

A virtual PPA is one of the contracting paths that corporate customers take to achieve their sustainability goals. Other paths include utility-sleeved PPAs, where a generator signs a PPA with the utility, and the utility reflects that PPA in the retail bill to the corporation. In either case, the corporation is motivated to achieve sustainability goals while hedging against future price increases associated with fossil fuel-based power.

In a virtual PPA, a generator sells power into the wholesale market, typically at a floating, market-prevailing price. The same generator enters into a long-term contract to sell renewable energy credits at a price that is the difference between the wholesale power price and the virtual PPA strike price. As a result, the generator receives a fixed dollar per megawatt-hour revenue stream against which financing can be raised.

What does the future of solar look like to you?
The future of solar looks very bright. Regrettable puns aside, utility-scale solar power today trades at $35 to $55/MWh, depending on project size and local conditions. Utility-scale solar is now price-competitive with conventional power.

Solar power projects create local jobs, are easy to permit, and are typically viewed favorably in the local community. Utility-scale solar adoption is accelerating rapidly, and it's just getting started. In fact, Bloomberg recently forecast power generating capacity additions through 2040, and predicted that solar would have the largest share of new capacity additions going forward.

How do you define the utility of the future?
The utility of the future is a catch-all term covering recent trends in the utility sector, from new technologies — AMI, batteries, solar — to new regulatory constructs — ISOs/RTOs, DSOs, retail choice. How these trends evolve and interact vary by utility.

What technology are you most looking forward to in the future?
The First Solar Series 6 technology will change the solar game. This technology uses 99 percent less semiconductor material and takes 95 percent less time to manufacture than conventional crystalline silicon. It will generate more than 420 watts from a single module, while generating 4 — 8 percent more energy per rated-watt of power depending on the local climate. And it's got a sleek, all-black appearance — think of the face of your iPhone or a flat-screen TV. It's a truly differentiated product that will change the solar game, and we're excited about its release in 2018.

Global affairs and geopolitics expert Thomas Barnett penned The Pentagon's New Map in 2004, and several other titles. At the American Public Power Association's National Conference in Orlando, Barnett will offer a sweeping view of the international conflicts and major forces that are shaping the planet. He connects the impact of climate change, demographics, foreign direct investment, energy, food, water, religious and ideological strife, the race for the Arctic, and the global economic tensions underlying them all. Here he sets the geopolitical context for the utility of the future.

How would you describe the current state of geopolitical play? How fluid is it?
From roughly 1980 to 2008, the world enjoyed a huge economic expansion that mirrored globalization's rapid spread around the planet. More humans were lifted out of poverty during those years than ever before in human history. No country was more instrumental in facilitating that development than the U.S., particularly in its encouragement of Asia's "rise." America welcomed Asia's imports, provided crucial security to the region, and, in return, Asian economies largely funneled their trade surpluses back into U.S. financial markets, keeping the cost of American credit virtually zero.

It was a great system while it lasted, but it could not go on forever. As in any economic expansion, bad behaviors accumulated (see, The Big Short), inequalities grew, and, when the inevitable crash came, populism spread throughout the world system, pitting the interior rural poor red states against the coastal cosmopolitan wealthy blue states.

Now the world, and the West in particular, suffers a lengthy bout of economic nationalism that attempts to turn back the clock. These efforts will fail and cause great economic damage, as they always do, but we will try them nonetheless. America still pines for the global economic dominance it enjoyed in the 1950s, which was almost completely a function of the vast devastation caused by World War II. So, no, the "good old days" are not coming back.

Historically, populism, in its abject failures (nationalism, protectionism), yields to progressivism. Once nations try to fix their own failures by cutting ties with the outside world, they realize that genuine internal reforms are needed. This is a cycle often repeated in American history.

What does it mean for the world? America is radically abandoning its global leadership role, as is Europe. Meanwhile, rising China and India are not yet prepared for that role and greatly distrust each other. That "G-Zero" situation allows Russia to step in and become the most dynamic great power in places like the Middle East, fueling great angst in the West that a resurgent Russia will once again threaten it.

President Barack Obama was right that Russia is only moderately endowed with strength and addled by numerous weaknesses, but his foreign policy of benign neglect greatly damaged stability in the Mediterranean basin, accelerating significant near-term security and social pressures on Europe in the form of refugee flows.

So, what we have right now is a world system without clear leadership, which makes power relationships very fluid and unpredictable. Will it be enough to destroy globalization? That is doubtful. But we are all going to move up a rather steep learning curve on the subject of global economics before collectively coming to our senses.

What are the foreign policy implications of the U.S. becoming a net exporter of energy resources such as natural gas?
Our almost half-century of efforts to provide security and stability throughout the Middle East have come to an end. There is strategic logic in this: not only our emerging energy independence but also Asia's emergence as the primary buyer of energy from the region. But Asia is not yet ready to step into that role, allowing energy exporter Russia to insert itself. Vladimir Putin is not interested in keeping energy prices low, and therein lies the danger.

Logically, America's energy independence would allow us to finally return to a more hemispheric-focused foreign policy that emphasized further economic integration with our best long-term source of demographic vitality and economic growth — the more rapidly developing and younger nations of Latin America. However, in our current bout of populism, xenophobia, and economic nationalism, we are choosing to do the exact opposite! If we persist in this approach, we will lose our primary advantage vis-à-vis the rest of the world's great power (except for India): namely, our relatively slow demographic aging and ever expanding labor pool.

How can electric utilities manage change? What will the utility of the future look like?
I think the U.S. energy and power industries are moving in the right direction of distributed, smart networks that emphasize the greatest degree of varied sources as possible. Our ongoing shift from being primarily an oil-based economy to a gas-based one is a fabulously beneficial development on all scores (much like our previous shifts from wood to coal, and from coal to oil). Again, our current bout with economic nationalism may cause us near-term difficulties. Coal is not coming back under any circumstances. It did not die over a few regulations but due to market shifts.

So, I guess I would say that we should all keep our eyes on the energy prize, which globally is the progressive de-carbonization of our source profile: less coal, less oil, more gas, more wind and solar, and, — yes, — more next-generation nuclear.

What technologies could be game changers in the global economy?
The big ones that I track are additive manufacturing — 3-D printing — and pervasive sensoring of human environments. Both will have revolutionary impacts on global supply chains: the former in terms of efficiency and speed, and the latter more in terms of security and transparency.

The vast bulk of globalization occurs among the world's coastal megacities. Those are the centers of innovation that should be most closely tracked.

Mark Mills is CEO of the Digital Power Group, a tech-focused capital advisory group. Previously, he co-founded and was chief tech strategist of Digital Power Capital, a boutique venture fund. He's worked as an experimental physicist and a developmental engineer. He's an expert writer and speaker for Forbes and is a frequent guest on major news networks. Mills spoke at the American Public Power Association's CEO Roundtable in Phoenix in February.

What are the issues regarding future technologies?
Interesting question — one that not enough people in Silicon Valley ask. The ethical issues associated with new technologies are the same as they have been for centuries. Most people suffer from a kind of presentism, in that they are tempted to think that radical technologies developed today have unique ethical (economic, political and social) implications, the likes of which have not been seen before in history. This kind of natural bias about the future — some people call it hubris — is understandable. It's hard to put into the mind of our counterpart circa, say, 1893, when people were literally in awe over the seemingly magical possibilities of electrification.

That's a long way of saying that today, as in every era, new technologies bring new benefits, whether in improving our economy or environment or health, but it has always been the case that those same technologies can be used for sinister purposes — and it has always been the case that some of the social changes that technologies bring are not universally viewed as good. It is of course obvious to many people that providing universal and ubiquitous wireless communications for nearly every human — we're not there, but we're very close — has enormous benefits. It also erodes privacy. Social media via cheap smart phones has been, literally, weaponized by radicals creating new forms of risks for society.

What do utilities need to be aware of when it comes to future technologies?
Electric utilities in particular have always been, and continue to be, at the nexus of technological change primarily because so much of significance in society requires electric power to operate. And the ascendant technologies of the 21st century are dominantly electric-using — the cloud, 3D printing, robots, drones, next-generation 5G networks. The implications of this are not so much the impact on total demand for power, but more importantly the continual rise in society's demand for ever more reliable and secure power. Power reliability and security are the primary challenges of the 21st century. In short, the demand for reliability now grows faster than the demand for the power itself.

What about the Internet of Things? What's the big deal?
The IoT represents the next big leap in the evolution of communications networks. There have been three communications eras, each far-reaching and each a quantum leap bigger in connections/nodes and thus impacts than the previous. Telegraphy began with thousands of nodes — connections or stations — followed by telephony with hundreds of millions, then wireless with billions. Now the IoT — enabled by the ever-collapsing size, cost and power needs of dust-mote-sized radios — will connect in real time trillions of things. This represents as big a leap technologically, economically and socially as each of the previous communications revolutions. The potential impacts are as hard to forecast as were the implications of wireless smartphones two decades ago. No one forecast Facebook, Amazon or Twitter. Metcalfe's law says that the value of a network grows with the square of the number of connections. As they say, do the math.

In the future, will we run out of energy?
Energy is unlimited; the universe is infused with and literally made of energy. Our access to energy in ways that are useful is entirely determined by technology. Thus, to think that we will run out of energy is, in effect, saying that we will run out of technology progress. Technology is what determines how and at what cost, economic and otherwise, energy is tapped, converted and moved or stored in useful ways. Of course, governments have a role too — as all energy sources require the use of land, and access to that land is determined by governments, whether directly if it's government-owned land or in how governments establish rules of land ownership.

How do you define the utility of the future?
Utilities, whether they will be called that or not in the future — there is, after all, a certain fashionability to different words at different times — will structurally resemble those that exist today because the laws of physics determine so much. Roads look pretty much the same today as in Roman times … because of gravity, wheels and friction, there are not many ways to build roads. There may be different ownership arrangements, as there have been in the past, but the key feature of the future utility will be rooted in radically improving reliability, and dealing with the economic challenge of making the physical infrastructure disappear into the background.

What technology are you most looking forward to in the future?
Can I say the long-and-healthy-life pill? Seriously, I'd list three if I can. First, the maturation of 3D printing which promises, when combined with the IoT and ubiquitous cloud supercomputing, the advent of the era of manufacturing-as-a-service. Second is the emergence of useful drones that will further "lubricate" commerce, not to mention fun, and in due course, personal flying cars. Third, the advent of bioelectronics (biocompatible, even consumable electronics), which will enable a new era of bio-semiconductors as big as the current silicon era (a $1.5 trillion industry) and collaterally radically improve health. There, with the last one, I got in my long-and-healthy-life pill.