utility sector disruptive changes (in eleven pictures )
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Utility Sector Disruptive Changes (In Eleven Pictures ). Remarks of Ron Binz Public Policy Consulting June 26, 2013 Ann Arbor. Public Policy Consulting. www.rbinz.com. US Electric IOUs Rating History 1970 – 2010. 4%. AA. A. AA. AA. 22%. A. AA. A. A. BBB. 46%. BBB. A. - PowerPoint PPT PresentationTRANSCRIPT
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Utility Sector Disruptive Changes (In Eleven Pictures)
Remarks of Ron BinzPublic Policy Consulting
June 26, 2013 Ann Arbor
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Public Policy Consulting
www.rbinz.com
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US Electric IOUs Rating History1970 – 2010
4%
22%
46%
27%
1%
Source: Standard & Poor’s, Macquarie Capital
AA
AA AAAA
A
AA
AA
BBBBBB BBB
BBB
BBB-
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Potential Bypass Threats from Distributed Generation are Large
• WECC-wide Behind-the-Meter DG: 19 GW of solar PV + 7 GW of CHP• Distributed PV based on “interconnection potential” (no back-flow through
feeders), with adjustments to reflect relative economics among states• CHP additions represent a fixed percentage (~40%) of technical potential in
each state7
0%
5%
10%
15%
20%
25%
30%
AB AZ BC CA CO ID MT MX NV NM OR UT WA WY
CHP Solar PV Customer-Sited DG Additions in WECC High DSM Case(Percent of Peak Demand)
Perc
ent o
f 203
2 Pe
ak D
eman
d
Source: E3 (2013).
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MichiganColorado New Jersey GermanyArizona
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Renewable Electricity Futures Study (REF)
Exploration of High-PenetrationRenewable Electricity Futures
Available at NREL.gov
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Baseline Case
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REF ITI Case
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How does the assumption of an HREF affect the business model?
Much higher levels of variable generation at the bulk power scale
Greater penetration of distributed energy resources at the distribution scale
Greater need for flexibility in the grid components, operations, and architecture
Much higher levels of energy efficiency (sufficient to eliminate load growth)
(affects utility organization, operations)
(affects utility revenues, services)
(affects utility investment, operations)
(affects utility role, services)
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• Thesis: Utilities must develop a set of new business models
• Thesis: Today’s regulation may not be up to the task– Rarely rewards utilities for desired behavior– Lack of incentives for
• firm efficiency• clean energy investment• energy efficiency• innovation
– Rate structures need revision– Focus on commodity sales– Balky, judicial process
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• Authors– Ron Binz– Richard Sedano– Denise Furey– Dan Mullen
Available at www.ceres.org
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I look forward to your questions.
Thanks for the invitation