WORLD-GEN_Vol_27_No_2 - page 11

WORLD-GENERATION MAY/JUNE 2015 V.27 #2
11
PERSPECTIVE
Innovation is driving change all across
the electric power industry. More than any
time in recent memory, the industry is in
the midst of a major, long-term transforma-
tion, as we adapt to meet growing customer
needs to be connected all the time and
everywhere.
FOREFRONT OF CHANGE
At the forefront of change, EEI’s inves-
tor-owned utility members are transitioning
to a low-carbon and digital future; steadily
integrating more renewables, particularly
wind and solar, into their generation fleets;
and enhancing the electric power grid to
accommodate all of the new technologies
coming to market.
At the same time, utilities are focused
on serving their customers and ensuring
that they are able to plug in all of their new
devices or access new services, while also
having flexibility and choice in how they use
energy.
Increasingly, the grid is evolving to
become a multi-directional network that
interconnects millions of consuming devic-
es, flexible distributed energy resources
including distributed generation, and back-
up generation. It is enabling a wide array of
new technologies and innovations, including
energy efficiency, electric vehicles, electrici-
ty storage, and microgrids to help custom-
ers better manage their energy use.
MAJOR INVESTMENTS NEEDED
Transforming the grid requires utilities
to make major investments to strengthen
reliability, enhance outage detection and
restoration, improve distribution system
monitoring, increase operational efficiency,
and integrate new resources. In 2014, our
industry was projected to spend $103.3 bil-
lion in total capital expenditures, which
would set another record. With renewed
focus on infrastructure, it is not surprising
that transmission and distribution are incre-
mentally more important to overall invest-
ment. Spending in both of these categories
is expected to steadily increase in relative
importance over the next few years.
EEI’s members are also leading the
way on electrifying the transportation sec-
tor, which enables utilities to support envi-
ronmental goals, builds customer satisfac-
tion, reduces operating costs, and enhances
national security by using more of our
national energy resources. In fact, more
than 70 EEI members have committed to
dedicate at least five percent of their fleet
acquisition budgets to EVs and technolo-
gies each year—that represents an annual
investment of approximately $50 million.
Not only is the electric power industry
electrifying vehicles, but transportation
electrification is becoming more and more
prevalent at our airports and seaports—and
utilities are making it happen.
As we continue to work to integrate new
innovations and technologies into the grid,
we are looking at change in an evolutionary,
not revolutionary, way. It is important that
large-scale systems work hand-in-hand with
distributed generation technologies; that
fuel diversity and flexibility are maintained;
and that microgrids and storage batteries
are in balance with traditional transmission
towers and lines—complementing one
another, instead of competing against the
other.
Thoughtful planning and strategy will
be needed to construct a balanced, aligned
system. This is where partnerships will be
critical.
Since utilities already plan, build, and
operate the grid, it just makes good busi-
ness sense that they should continue to be
the planners, builders, and operators of
the power grid, working in partnership
with third-party technology providers and
customers. Not only is this the most cost-
effective solution, it will also ensure that
the reliability and resiliency of the system
are maintained.
PUBLIC POLICY DRIVES CHANGE
While new technologies and customer
expectations play critical roles in the
industry’s ongoing transformation, public
policy is also a major driver of change.
Going forward, it is essential that policies
continue to recognize the value that the
grid provides both as a platform for
diverse, reliable, and affordable electricity,
and as a facilitator for new technologies
that give customers more choices and
more control over their energy usage.
At the end of the day, safe, reliable,
affordable, and increasingly clean electrici-
ty is essential to nearly everything we do.
Electricity’s value is unmatched, and the
electric grid powers endless possibilities.
As the grid continues to evolve, it is impor-
tant that customers, utilities, technology
providers, and policymakers join forces to
drive its transformation.
Thomas Edison once said, “What you
are will show in what you do.” With so
many customer-focused innovations hap-
pening across the United States, the future
of the electric power industry is rapidly
unfolding—that future is happening now.
Mr. Kuhn received a BA in Economics
in 1968 from Yale University, served as a
Naval Officer following his graduation, and
completed a Masters in Business
Administration in 1972 from George
Washington University. He completed the
Stanford University Graduate School of
Business Senior Executive Program in 1989.
President
Edison Electric Institute
POWERING INNOVATION
BYTHOMAS R.KUHN,CLASS OF 2005
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