We no longer fret over taxes on tea, but there’s another American Revolution forming in our great nation today. Like the colonist uprising 241 years ago, it’s fueled by a need to stand up against an outdated system that threatens our way of life.
It’s a battle over the future of American energy and our antiquated electric grid. And it centers around the way consumers, utilities, and investors interact with this vast network of powerlines, substations, and plants.
As Cheryl Roberto, who leads Environmental Defense Fund’s Clean Energy program, notes, “The U.S. is poised to spend around $2 trillion over the next two decades replacing our outdated electric infrastructure.”
That’s a lot of coin and a tremendous opportunity.
We’ve detected five emerging trends that may forever change how we produce and consume electricity. It will be an American approach to energy that wastes less, pollutes less, and, as Cheryl likes to say, “puts customers in the driver’s seat.”
It’s made by, and for, you and me.
Trend #1: Utilities think quality, not quantity
Power companies, like people, respond to incentives. The current regulatory framework in the United States incentivizes utilities to invest more in power stations and infrastructure than in building value for consumers and the environment.
If they are to survive the Revolution, utilities need to re-think the model, and the regulatory framework needs to change to support utility investments in renewable energy and energy savings. It sounds daunting, but it’s already happening in New York State.
Trend #2: Clean energy finance takes hold
While rooftop solar panels are becoming more common, securing financing for these and other energy investments and retrofits can be tough. Clean energy is more than a way for homes and businesses to lower bills and protect the environment; these upgrades also represent a serious investment opportunity.
Today, states are beginning to connect investors with programs such as on-bill repayment for large and small residential projects. Commercial properties are getting in on energy efficiency, too, thanks to the Investor Confidence Project which brings standardization and quantifiable metrics to energy efficiency projects in the commercial building sector.
The result: lower operating costs, higher market value, and a significantly lower carbon footprint.
Trend #3: Everyone gets a stake in the grid
Going back to incentives, energy-savings programs like demand response help consumers adjust their power consumption during peak times by offering a financial reward for doing so. By empowering consumers (forgive the pun) we can use resources far more effectively and efficiently.
Distributed energy is a related concept, calling on smaller-scale clean energy resources such as energy efficiency, energy storage, and local, on-site generation to complement traditional sources. California is at the forefront in this area.
Trend #4: Vastly improved batteries open new doors
Rapid advancements in battery technology are making batteries a surprisingly disruptive – for the better – force in the modern American Revolution. EDF’s Midwest Clean Energy Director Dick Munson reports that improved batteries could put renewable energy sources in the lead.
“When the wind stops blowing or the sun goes behind a cloud, batteries are able to provide back-up power until those resources are back online,” he writes.
Until recently, battery cost was prohibitive, with systems costing as much as $1,500 per kilowatt hour. Today the average is between $500 and $700, and dropping. Bonus: Someone has to build these batteries, and that means jobs. Just ask North Carolina and Illinois.
Trend #5: Coming: Federal policies to support it all
All of these trends are independently worthwhile, but the Clean Power Plan may be the glue that binds them all together. In addition to putting the first-ever limits on power plant emissions, the plan offers states impressive freedom to choose how to meet their emissions goals, and the trends above will play out as states exercise that freedom.
Freedom is the hallmark of any true American Revolution, after all. As is our quest for a stronger, better, and more innovative nation.
To take a page from the classic 1980s cartoon He-Man: Americans can be masters of our energy universe. We…have…the power!
Article by Dan Upham, Editor, Environmental Defense Fund Energy Exchange Blog.
