Disruptive technologies and the future of the utility business model
•
1 like•2,134 views
Disruptive technologies and the future of the utility business model
Recommended
Recommended
More Related Content
Viewers also liked
Viewers also liked (14)
Similar to Disruptive technologies and the future of the utility business model
Similar to Disruptive technologies and the future of the utility business model (20)
More from Black & Veatch
More from Black & Veatch (20)
Recently uploaded
Recently uploaded (20)
Disruptive technologies and the future of the utility business model
- 2. AGENDA 1. Introduction 2. Disruptive Technologies 3. Future Utility Business Models 2 We will make electricity so cheap that only the rich will burn candles Thomas Edison Image source: Shine‐Co Antique LED 6 W bulb ‐ $20 on Amazon, Accessed April 16 from: http://www.amazon.com/Shine‐Co‐Antique‐Filament‐Squirrel‐110‐220V/dp/B01AT2HCEU/ref=sr_1_32?s=hi&ie=UTF8&qid=1461005021&sr=1‐32&keywords=led+edison LED Bulb
- 3. The B&V Growth Accelerator is committed to identifying the next set of challenges for B&V and our clients • Current & Future – B&V Growth Accelerator • Drones • Autonomous vehicles • Augmented reality • High‐density urban agriculture • Space elevators • Recent Past – Western Director Renewables • Utility Planning • Distributed Generation • Renewable Energy Transmission Initiative (RETI) SPEAKER BACKGROUND RYAN PLETKA 3
- 5. • Obligation to serve • Natural monopoly • Economies‐of‐scale • Public good • Network system • Safety • Reliability • Sophisticated Technology ELECTRIC UTILITY FEATURES 22 April 2016 5 Black & Veatch
- 6. • Obligation to serve • Natural monopoly • Economies‐of‐scale • Public good • Network system • Safety • Reliability • Sophisticated Technology ELECTRIC UTILITY FEATURES 22 April 2016 6 Black & Veatch Source: Design concept from Kyuho Song and Boa A. Available at: https://www.behance.net/gallery/9803275/Window‐socket. Accessed April 20, 2016
- 8. Data Source, CDC, National Health Interview Survey, http://www.cdc.gov/nchs/nhis/releases.htm, accessed April 17, 2016 Other source: http://www.digitaltrends.com/home/you‐can‐still‐call‐about‐40‐percent‐of‐u‐s‐households‐on‐a‐landline/ accessed April 17, 2016 PERCENT OF U.S. HOMES WITH LANDLINE TELEPHONES 8 0 10 20 30 40 50 60 70 80 90 100 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
- 9. Data Source, CDC, National Health Interview Survey, http://www.cdc.gov/nchs/nhis/releases.htm, accessed April 17, 2016 Other source: http://www.digitaltrends.com/home/you‐can‐still‐call‐about‐40‐percent‐of‐u‐s‐households‐on‐a‐landline/ accessed April 17, 2016 PERCENT OF U.S. HOMES WITH LANDLINE TELEPHONES 9 0 10 20 30 40 50 60 70 80 90 100 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 “There will be so few people on the network that it won’t be economical to maintain it,” Jon Banks, United States Telecom Association FCC now requires telcos provide 3 months notice before abandoning copper network
- 10. KAUAI ISLAND UTILITY COOPERATIVE Black & Veatch 10 22 April 2016 • 2007: over 94% of Kauai’s electricity was generated from imported fossil fuels • 2016: Renewables hit 90% on four days in January (hydro, biomass, solar) – 38% annually on an energy basis Data Source, KIUC: 2008 Integrated Resource Plan; KIUC Press Release: http://website.kiuc.coop/sites/kiuc/files/PDF/pr/pr2016‐0203‐90percent.pdf
- 13. California RPS Laws: • 2002: 20% by 2017 • 2011: 33% by 2020 • 2015: 50% by 2030 • 100% RPS? RENEWABLE PORTFOLIO STANDARDS 22 April 2016 13 Black & Veatch
- 14. 50% RPS: ONE POTENTIAL PORTFOLIO 4/22/2016 Out of State (WY, NM) • Source: WECC‐wide Portfolio from CPUC RPS Calculator v6.2 • Key Issues • Cost • Transmission • Out‐of‐state issues • Integration • Curtailment • Environmental Impact Legend (500 MW Blocks) Each icon represents about 500 MW Locations are approximate New and contracted renewables for IOUs Utility‐scale only Biomass and hydro not shown Wind Solar Geothermal
- 15. 50% RPS: ONE POTENTIAL PORTFOLIO 4/22/2016 Out of State (WY, NM) • Source: WECC‐wide Portfolio from CPUC RPS Calculator v6.2 • Key Issues • Cost • Transmission • Out‐of‐state issues • Integration • Curtailment • Environmental Impact Legend (500 MW Blocks) Each icon represents about 500 MW Locations are approximate New and contracted renewables for IOUs Utility‐scale only Biomass and hydro not shown Wind Solar Geothermal Tehachapi CREZ
- 16. Tehachapi CREZ
- 20. • Black & Veatch’s latest survey of utility executives reported that • Almost two‐thirds believe energy storage will be the most important factor facilitating integration of wind and solar • The second and third most important factors are “transmission upgrades” and “new flexible conventional power plants” • Lower cost flexibility options may be available (market rules, demand response, etc.) • At the distributed level, understanding and shaping customer behavior will be essential RENEWABLE INTEGRATION ‐ VARIETY OF OPTIONS AVAILABLE TO PROVIDE FLEXIBILITY 20
- 21. The complexity and cost of integration will increase as renewable energy increases • Seasonal to multi‐year storage • Hydrogen • Mega interconnections • Bi‐directional EV • Flexible renewables • Power “natural” gas • Water‐energy integration (e.g., desalination) • 4th Generation DER ‐ optimization RENEWABLE ENERGY INTEGRATION – NEXT‐GEN INTEGRATION OPTIONS 22 April 2016 21 Black & Veatch Source: NBC News, accessed April 17, 2016
- 26. Source data: EV Sales: PEV Collaborative, http://www.pevcollaborative.org/sites/all/themes/pev/files/3_mar_PEV_cumulative.pdf, Accessed April 18, 2016. Original data adapted from www.hybridcars.com Tesla Model 3 reservations: Twitter @elonmusk, http://electrek.co/2016/04/14/tesla‐model‐3‐reservations‐2/ California, 196,447 US Total, 428,816 0 100,000 200,000 300,000 400,000 Jan 2011 Jan 2012 Jan 2013 Jan 2014 Jan 2015 Jan 2016 U.S. & CALIFORNIA CUMULATIVE EV SALES 22 April 2016Black & Veatch 26
- 28. Source: Tesla. B&V Estimates. GTM Research, U.S. Energy Storage Monitor ‐ 2015 Year in Review, available at http://www.greentechmedia.com/research/subscription/u.s.‐energy‐storage‐monitor ELECTRIC VEHICLES VS. ENERGY STORAGE MARKET SIZE (MWH) 22 April 2016 28 Black & Veatch 28,000 4,030 161 0 10,000 20,000 30,000 Equivalent Capacity of 400,000 Model 3s US Stationary Battery Market ‐ 2016‐2020 US Stationary Battery Market ‐ 2015 MWh
- 29. • The U.S. coal industry has lost 90% of its market capitalization in the last 5 years COAL, ENERGY EFFICIENCY AND DEMAND RESPONSE 22 April 2016 29 Black & Veatch 0 5 10 15 20 Alpha Natural Resources Cloud Peak Arch Coal Peabody Energy Fraction of 2014 US Coal Production, % 0 50 100 150 4/16 Market Capitalization, $M Source: Stock quotes as of the week of April 16. Survey Monkey valuation from CB Insights. Coal production data from EIA, https://www.eia.gov/coal/annual/pdf/table10.pdf.
- 30. Within energy, investment is going to innovative, distributed, data‐intensive, customer‐centric solutions. Smart grid, Internet‐of‐Things, etc. • Opower market capitalization: $450 million • Survey Monkey private valuation: $2 billion • Google purchase of Nest: $3.2 billion COAL, ENERGY EFFICIENCY AND DEMAND RESPONSE 22 April 2016 30 Black & Veatch Source: Stock quotes as of the week of April 16. Survey Monkey valuation from CB Insights. Coal production data from EIA, https://www.eia.gov/coal/annual/pdf/table10.pdf. 0 5 10 15 20 Alpha Natural Resources Cloud Peak Arch Coal Peabody Energy Fraction of 2014 US Coal Production, % 0 50 100 150 4/16 Market Capitalization, $M
- 31. DER PLANNING 31
- 33. • SMUD engaged Black & Veatch to assist in assessing integrated Distributed Energy Resources (iDER) • Major tasks • Review of existing work and processes; tie together approaches • New, detailed assessments of potential through dispersion modeling • Distribution system modeling • Bulk system modeling • Economic valuation • Rooftop PV potential modeling • First of a kind study PV EE DR CHP ES EV SMUD INTEGRATED DER ASSESSMENT PROJECT BACKGROUND 33 Projected DER Load Impacts ‐ 2030
- 41. POTENTIAL DER IMPACTS – NET LOAD EXAMPLE ONLY 41 ‐300 ‐200 ‐100 0 100 200 300 400 500 600 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 MW DR ES ‐ Utility ES ‐ Customer EV PV ‐ Customer EE CHP Utility Load Net Load ‐DER
- 45. • Objective is to envision where the electricity system may be in 20 years, possible pathways there, key needs • Karlynn Cory was a lead investigator ‐‐ now with Black & Veatch • Potential use: Basis for workshop to initiate conversations, build engagement and discuss strategies • References: • Informing Electricity Systems of the Future: Key Analysis Needs NREL/JA‐ 6A20‐62517 • K. Cory; A. Aznar 2014 • Electricity Journal Vol. 27 (9) November 2014 pp. 73‐82. • Flexible Solar Utility: Preparing for Solar's Impacts to Utility Planning and Operations NREL/TP‐6A20‐64586 • John Sterling; Ted Davidovich; Karlynn Cory; Alexandra Aznar; Joyce. McLaren September 2015 NREL FRAMEWORK – ELECTRICITY SYSTEMS OF THE FUTURE 4/22/2016 45
- 46. Not necessarily exclusive. Future will likely be a mix. Different for all utilities. NREL FRAMEWORK: FIVE VASTLY DIFFERENT FUTURES 22 April 2016 46 Black & Veatch • Goal: replace aging assets with same, newer assets; meet existing fed/state policies • Objective = least‐cost Business as Usual • Goal: replace aging generation w/low‐carbon, centralized gen • Objectives: lowest risk, lowest carbon Low‐Carbon, Centralized Generation • Goal: Growth of distributed energy resources (DER: non‐dispatchable DG, distr. storage) • Objective: Resiliency Rapid Growth of DER • Goal: Fully interactive T&D grid and substantial interactive demand (including DR) in 20 yrs • Objectives: grid flexibility, consumer desires Interactivity: Grid and Demand • Past a tipping point – measureable grid defection in next 20 yearsGrid Defection
- 47. 47 NREL Framework: Future Directions – Key Takeaways Emerging Disruptions / Drivers Low‐carbon centralized Rapid Growth of DER Interactivity: Grid & Demand Improved electric system flexibility X X X Financing opportunities X X X Technology improvements X X X Carbon policies (e.g. 111(d), tax) X X Limited NG expansion X X Transmission planning X X Transmission cost allocation X X Bulk power market updates X X Valuation of new services X X Ownership opportunities X X Local concerns about resilience X X Electrification of transportation X X Policies supporting DER X Improved/new control systems X Future Outlook
- 50. FLIPPING THE DER EQUATION FROM RISK TO OPPORTUNITY – POTENTIAL UTILITY ACTIONS: 50 Smart DER Deployment Smart DER Deployment Assess DER potentialAssess DER potential Analyze customer load/rates to target high benefit/cost Analyze customer load/rates to target high benefit/cost Identify DER locations to maximize T&D value Identify DER locations to maximize T&D value Restructure rates / incentives to encourage DER in the right locations Restructure rates / incentives to encourage DER in the right locations Proactively plan T&D for rising DER penetration Proactively plan T&D for rising DER penetration Establish DER regulatory framework and engage stakeholders Establish DER regulatory framework and engage stakeholders Customer Engagement Customer Engagement Streamline DER interconnection, incentives, and permitting Streamline DER interconnection, incentives, and permitting Provide a customer engagement platform for DER Provide a customer engagement platform for DER Create optimization tools for achieving zero net energy buildings Create optimization tools for achieving zero net energy buildings Offer options for customers who cannot install DER (e.g., community solar) Offer options for customers who cannot install DER (e.g., community solar) Allow on‐bill financing of DER Allow on‐bill financing of DER Project Execution Project Execution Develop, design and deploy utility‐ or customer‐owned DER Develop, design and deploy utility‐ or customer‐owned DER Invest in and own DER portfolios (inside and outside service territory) Invest in and own DER portfolios (inside and outside service territory) Develop, design, and deploy microgrids (e.g., PV plus battery storage) Develop, design, and deploy microgrids (e.g., PV plus battery storage) Design and construct distribution system upgrades Design and construct distribution system upgrades Implement communication network upgrades Implement communication network upgrades Utility Operations Utility Operations Monitor, forecast, and control DER to ease grid integration Monitor, forecast, and control DER to ease grid integration Implement new IT systems (e.g., DMS, DERMS) Implement new IT systems (e.g., DMS, DERMS) Deploy and operate utility‐ owned smart inverters Deploy and operate utility‐ owned smart inverters Provide O&M to DER installations in their service territory (utility‐ or customer‐owned) Provide O&M to DER installations in their service territory (utility‐ or customer‐owned) Procure grid services from utility‐ or customer‐owned DER Procure grid services from utility‐ or customer‐owned DER
- 51. • From the outset, the electricity industry has been an enabling and disruptive industry – utility business models evolved very rapidly • Disruptive technologies are rapidly enabling many new possible pathways to meet customer needs and policy objectives • Flexibility in options is freeing, but can make planning more challenging and nuanced • The importance of culture should not be underestimated: agility, flexibility, innovation, forward‐thinking, test and experiment, customer centric, solutions vs. products • If we don’t innovate, others will do that for us… CONCLUSIONS