4 New Year’s Resolutions for Transforming the U.S. Electricity System
It’s that time of year when people make New Year’s resolutions, commitments to do things differently in the coming year that are going to have a positive impact on their lives. But what would New Year’s resolutions look like if the United States as a nation resolved to decrease its fossil fuel consumption and increase the adoption of efficiency and renewables?
I sat down with program director James Newcomb and principal Lena Hansen to find out. They offered up four New Year’s resolutions that can help make the United States’ electricity system more efficient, more resilient, and more planet-friendly sooner than later.
1. Invest further in end-use efficiency.
Energy efficiency is often considered one of the cheapest and most readily available energy sources. Investments in efficiency programs have been increasing around the country, but significant opportunity remains on the table and many utilities are still incentivized to sell more electricity, rather than to sell more efficiency. Taking end-use efficiency to the next level will require utilities and consumers to work more closely together than ever before. Utilities especially can take several steps to make that happen: a) improve efficiency program marketing to truly engage customers and increase participation, b) streamline program transaction costs, such as by implementing faster and simpler energy audits, c) adopt regulatory mechanisms that remove utilities’ disincentives and create incentives to sell efficiency, and d) embrace collaboration with other stakeholders, including regulators, NGOs, auditors, customers, and architectural and engineering firms.
2. Anticipate and head off friction over solar.
As the cost of solar has come down in recent years (19 percent overall between 2011 and 2012 alone, ranging from 15 percent for residential solar up to 30 percent for utility solar) and new business models have emerged, solar is becoming cost competitive with grid-sourced electricity in an increasing number of locales. Meanwhile, the amount of installed solar continues to grow. (According to the Solar Energy Industries Association, the U.S. now has more than 6,400MW of installed solar electric capacity, enough to power more than 1 million average American homes.) These trends are set to continue, and as they do, there’s likely to be increased conflict between utilities, solar companies, and customers. Utilities, regulators, and solar companies need to come together now to dialogue and develop regulatory, business, and pricing models that will enable sustained growth for the solar market while still compensating utilities for the real and valuable grid services they provide.
3. Learn from 2012’s debilitating storms and make grid resilience a priority.
From devastating droughts in the Sahel and America to extreme flooding in Australia, from Western wildfires to Hurricane Isaac and Superstorm Sandy, 2012 was the year of debilitating storms and other weather and climate events that knocked out power for millions and millions of people. Such massive, widespread outages had very real and damaging impacts, from loss of life to billions of dollars lost. It is time to learn from those experiences and begin a genuine conversation about what it will take to fundamentally transform the grid’s architecture to make it inherently more resilient. The conversation must move beyond simply “hardening the grid” by trimming trees or installing expensive underground lines, which are more or less Band-Aids. A more decentralized electricity system—one built upon greater levels of rooftop solar, efficiency, electric vehicles, smart controls for customers, and more—has the potential to support greater resilience, but represents more fundamental and transformative change that must be thought through carefully.
4. Don’t think or act incrementally when it comes to long-term infrastructure.
The U.S. has been under-investing in its electricity system infrastructure for a long time. Even without the devastation caused by storms such as Sandy and the rebuilding that goes along with it, that system will require significant investment in 2013 and beyond. The Brattle Group estimates that the U.S. will need to invest up to $2 trillion in its electricity infrastructure by 2030, for example. But once such infrastructure investments are made, they’re there for decades. Let’s not make incremental investment decisions based on what we’ve always done; the status quo must go. Instead, we must be thoughtful, think systematically, and consider the best overall solution—not the best incremental Band-Aid—before acting. For example, is a new transmission line the best option, or could efficiency and distributed resources closer to the point of use meet the need? These are but four commitments of many the U.S. could make to improve its electricity system. And while the change will happen over the long term, the time to resolve to make that change—and take the first steps toward it—is today.
Some Images courtesy of Shutterstock.com.