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This is the second article in a six-part collaboration between Ben Bovarnick and Sara Harari. The collection closely examines the barriers facing adoption of new, advanced energy technologies that can revolutionize electric-grid operations and utility business models and spark potential solutions to elicit faster transformation in this expansive industry.
Let’s say you’re upgrading your phone. The time has come for a new one, you dropped it in the pool, the dog ran away with it, it was destroyed by accident, or it vanished mysteriously. You’re at the phone store and there are 13 billion options.
The salesperson is trying to sell you on upgrading to a newer version of your old phone. There’s this other one that comes with Netflix on it, but who knows what the service territory is? How do you make up your mind? You can go with your gut or you can do some research. After all, you can’t invest if you don’t know what you’re getting into.
The same thing is true of utility companies.
From batteries to blockchain, the energy sector is enjoying a period of rapid innovation with new technologies coming to market that carry the potential to upend traditional electric infrastructure and business models. Yet electric utilities and other electricity providers have been slow to adopt these novel technologies largely because they lack the information to fully weigh their options.
In this article, we will explore the communications failures that inhibit electricity providers from investing in advanced energy technologies. (Throughout this piece, we refer to utilities as shorthand for utility companies and other electricity providers.)
Meeting with utility representatives, we frequently encounter stories of vendors and developers pitching their technology to utilities with little success. It can be difficult to shoehorn advanced energy technologies into the established utility public-procurement process. Utilities want to see solutions, not science. But it’s challenging for vendors to educate utilities on new ways to solve old problems without a new way to communicate.
There’s currently an understated paradigm shift in the procurement process that is revolutionizing how utilities make new investments. Utilities must reimagine how to procure the technological best fit. And integration may require technologies or strategies new to the utilities and/or unfamiliar to state regulators. Utilities face a complex task: they must ensure any integration is cost-effective and preserves system reliability while considering new and innovative solutions.
On the other side of the procurement process, vendors marketing potentially innovative and disruptive energy technology can find themselves working as educators. They must teach utilities about the value their products can provide at trade shows, through pilot projects and in stakeholder workshops. |
