There are so many things changing in the utility business it is almost certain to be a rich source of opportunity for clever startups. What might those opportunities be?
This will be explored in a roundtable discussion set for May 7 from 9:30 am to 1:30 pm. We have invited a number of experts to kick off the discussion, and then we will open it up to the audience to explore the questions that are raised. The idea is to speculate what might be in store five or ten years out, and use that to spark some ideas as to useful products and services that might result.
To register to the event, use this LINK.
The potential questions we have in mind covering are these, to the extent we can:
Will the investor-owned utilities become just a poles-and-wires business?
- If so, will that business also involve network management (clusters of microgrids, CCAs, and public-owned systems)?
- Can network management become a profitable business? What’s the latest experience in managing multiple microgrids? What insights does this provide?
- What would be a viable pricing strategy for network management? A fixed monthly fee?
- What role would the network manager have in setting prices for various services like load management, frequency and voltage control, reactive power, ramp up and backup? Will it all be regulated?
- Would a network manager be allowed to invest in equipment to provide those services itself rather than purchasing them from third parties?
- Could there be an integrated network manager arise that does not own the poles and wires?
- How would the future of public-owned utilities be different than for investor-owned utilities? Would they remain integrated utilities?
- With the rise of CCAs supplying now over 25% of all power in the state, and likely to reach 50%, what will happen to the existing power purchase agreements with the utilities? Will they be successfully remarketed?
- The same will occur as Direct Access is potentially expanded. Will there be a new “stranded cost” if they are sold at prices below the original contract price? Who will pay that?
- What might be the business opportunity in refinancing these contracts to achieve lower prices? How will the PG&E bankruptcy play into this remarketing?
- What will happen to net-metering? If there is a fixed monthly poles-and-wires charge, will in effect net metering prices fall to just the avoided wholesale power supply price? How will that affect the installation of rooftop solar?
- Will the new mandate for rooftop solar on new dwellings intensify the interest in storage?
- Will the economics be better for distributed storage or centralized storage? Currently, local marginal prices for power are sometimes negative. Will that happen more frequently?
- Will demand management and load control significantly lessen the need for storage? What kind of software would be needed to make this extremely responsive to changing conditions?
- With huge economies of scale in acquiring, delivering, and managing power, will the CCAs consolidate? Or will someone arise to provide services to CCAs on a consolidated basis, while multiple CCA local governing boards continue to exist?
- Will the new structure of the utility business make local generation projects more attractive? They tend to be higher cost than big projects. Will anything change that?
- Will the gas utilities be immune to these changes? Would the introduction of a “renewable gas portfolio standard” and provision for customer direct access to discrete supplies trigger the same evolution?
This is a lot of questions. We may not be able to get to them all, but it frames the extraordinary range of the opportunities that may exist. We will cover as much as we can. Then we might have another session later in the year.
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Big changes are underway for utilities. What doors might that open for some new solutions and new business opportunities? Will the traditional utilities become more like network managers? What would be their software needs? How would rates change?
ABOUT THE AUTHOR
Gary Simon is the Chair of CleanStarts Board. A seasoned energy executive and entrepreneur with 45 years of experience in business, government, and non-profits.