How Innovation is Driving Change in the Energy Industry
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Listen to our audio Q&A with |
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Q&A with Stephane Kirkland—Senior Vice President, Strategy & Solutions
Parts 1 & 2 of a 4-part series.
Today we are seeing technological innovations that are going to revolutionize the energy industry, and change how all consumers use energy. The vision for these advancements is to give consumers—large and small—the ability to see a real-time view of how much electricity they are using and how they’re using it. As electricity prices change—sometimes drastically—from one moment to the next, these technological innovations would allow customers to evaluate and adjust how they’re buying electricity to optimize their energy spend.
Q1: As all of this innovation takes hold, how will it impact the industry and consumers?
A1: It will change how businesses think and behave. What’s really intriguing is what is going to change in how energy users actually behave. It’s not about the technological possibility, it’s about changing how we actually do things. It’s about where people and organizations want to spend time and resources, and what they actually have the capability and will to do. It’s the difference between the “could be” and the “will be.”
What’s interesting is that in the area of retail energy, the tools available to the end user and the actual technological progress is fairly limited. No one is exactly inventing the steam engine here. Having an electricity meter pulse data out over a network and assembling that data in a clever way on a screen, then combining that with data from other sources and even using that data to turn electricity-consuming devices up or down—is not really pushing the bounds of human technological capability.
Like telecommunications, innovations in the energy industry are all about how the pieces interact, about the rules and standards that govern the system. And, the industry is not really driven by straightforward scientific progress but rather the complex interplay of regulation and the simple entrenchment of practices—how people are used to thinking about things and doing things and how they could be doing things. It’s about finding the best way to assemble a set of well-known components in a particularly clever way. The issues are about standards, formats and interoperability. Of course, the user interface or architecture of the information is a form of technological innovation itself—the same kind that the iPhone represents in the cellular industry.
Q2: Besides the innovations around improving the format and interoperability of existing components of the energy industry system, aren’t there emerging scientific technologies and tools that are also affecting the industry?
A2: The real scientific advances in the energy industry are coming elsewhere, such as in the technology to produce photovoltaic cells, in carbon capture and sequestration, in electric vehicles and in electricity storage technologies. And, what’s interesting is that the driver for these advances is not technological innovation. The drivers are social and political in nature.
As energy prices continue to increase and we deplete easily-accessible sources of hydrocarbons, the geo-political issues driving energy independence are encouraging us to find new ways to generate energy, new sources for generation and new ways to conserve so that less is needed.
Our society’s appetite for addressing the issue of climate change is also driving innovations, such as carbon capture to lower or eliminate emissions from existing energy generation fuel sources, or new technologies around clean, renewable forms of energy generation.
In addition, there’s a galaxy of political issues that are constantly changing the regulatory framework and how resources for producing energy are allocated. On a local level, this includes what retail prices customers pay in a given utility territory or whether or not renewable projects are developed a particular area. On a broader scale, this includes issues such as how to ensure that there is enough spare capacity at all times in a regional grid and what type of system is used to secure and pay for that capacity. At a national level, this includes issues such as whether or not carbon emitters will need to pay a price for the carbon they emit. At all levels, these are all examples real-life factors that play a key role in determining how resources get appropriated to develop electricity generation assets.
Click here to listen to the audio Q&A #1.
Click here to listen to the audio Q&A for #2.
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