The electric industry is changing! This is old news to many of you, but in my 30-year career in the electric utility industry there has never been as many driving forces for change that could so fundamentally change the industry. Things like new regulatory models, increasing renewable energy policy goals, more climate change awareness, increasing levels of DER adoption, competitive cost of renewables, increasing use of energy storage, and electric vehicles will make the previous 30 years of progress look positively quaint.
In the past, the electric industry casually kept an eye on the latest new trend being discussed in conferences around the country. Remember fuel cells and microturbines and how they were going to change the industry? Those next big things felt more like those late-night infomercial kitchen utensils that would make chopping easier. The product would amaze you but, in the end most people still ended up using the same kitchen knife as before because it was more familiar. So, utility executives kept on building new combined cycle power plants and new substations, business as usual, because it was familiar. In Hawaii, we needed the convergence of a natural disaster in Japan to spike up electricity costs, the sudden drop in solar PV costs, and massive tax incentives to exponentially grow the DER market before the utility reacted.
The utility industry is good at reacting to trends and events. We thrive when we know the problem and need to execute plans to address the issue. In Hawaii, we reacted to the DER trend by developing new tariffs to help address system issues, pushed the industry to implement new smart inverter functions, implemented new technologies such as secondary VAR controllers to address voltage issues, and proposed new planning processes to manage the changes. Being on the “bleeding edge” playing catch-up is exciting but not a recommended best practice.
This reactive trend can’t continue because the next set of challenges are already here and they carry exponentially more risk than the challenges that have come before. Electric vehicles are one immediate disruptive technology that the electric industry will face. Increasing consumer demand and supportive public policies will spur adoption. The potential impacts on distribution grids are similar to DER impacts – overloaded equipment, voltage issues, power flow imbalances, and not knowing when and where these new loads will occur. Will we be proactive this time to avoid the potential problems? With so many things in the industry called “smart” – smart meters, smart inverters, smart homes and smart grids – are we “smart” enough to meet this challenge?