Renewables can be a catalyst to move utilities to innovation

Sunrise over Solar and Coal Power Plant (NPTRE.com)
Sunrise over Solar and Coal Power Plant (NPTRE.com)

Between 1970 and 1998, global energy use rose close to 70% and demand for energy continues to rise at a rate of about 2% each year.  Energy use and resource extraction drive the global economy and development worldwide.  Increases in fossil fuel energy use, increases emissions, including greenhouse gasses, resulting in global warming effects, putting human and environmental health at risk.


The use of traditional feed-stock (Coal, Diesel Natural Gas, etc.) to produce electricity exposes the market to commodity price fluctuations.  Commodity markets are influenced by limited supplies, growing demands, distribution capacity, and environmental restrictions, which drives prices up.


The use of Renewable Energy has no feedstock cost in and very low operating costs.  Due to the benign operations and lack of emissions from Renewable Energy it can be deployed close to the users of electricity.  This is referred to as Distributed Generation (DG) and is gaining adoption as smart-grid infrastructure investments are being made.  This is creating a dramatic shift in how our energy is delivered to markets verses the traditional central power plant with radial distribution.  When deployed properly, this provides better quality of electricity, stabilization, and reliability to the grid  


Renewable Energy requires large capital investments, which can make the adoption restrictive.  Incentives by the federal and state governments are provided to de-risk projects and promote adoption for the good of the United States and society as a whole.


The energy market, in general, whether it’s renewable, oil, natural gas, coal, nuclear, etc. are capital intensive and serves the greater good to society.  Incentives are used as tools to de-risk capital investment and to insure long-term investments in projects. Incentives come in many forms, such as: Grants, Tax Credits, Accelerated Cost Recover, Master Limited Partnerships, and guaranteed market share and returns.  The United States has been able to create markets and products and services that are driven by capitalism.  But when faced with endeavors that capitalism cannot solve government intercedes with mechanisms that ensure long-term investment in our country and society.   These investment mechanisms built the Hover Dam, created the largest, most reliable energy grid, phone system, and postal service, and put a man on the moon.  As these markets develop and evolve they transition to a capitalistic model thus creating companies such as Sprint, FedEx and SpaceX. 


Contrary to industries that have made these transformations the electrical energy erid and the stewards of it, the utilities and PUCs have not.  The lack of incentives and mechanisms to prompt invest in infrastructure and lack of competition has keep this industry stunted.  Deregulation has helped move this industry towards transition but the implementation of independently owned Distributed Generation and technology developed outside of walls of the utility companies is pushing this industry to finally innovate.  Whether the utilities want to be a part of this is up to them.    A new dawn has arrived and this is the first step..............

( www.NPTRE.com )

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