When Tesla unveiled the utility-scale Powerpack battery in 2015, analysts and observers excitedly proclaimed the product’s low price point would revolutionize electric grid operations and business models as it set new cost benchmarks for energy storage. But despite the hype, the reception from utilities was tepid at best. This experience is not unique to Tesla. It leads to a big question: What’s stopping utilities from quickly pivoting to new energy technologies? Unlike other industries that can quickly adopt new technology, utilities and their regulators must make more cautious deliberations.
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.
Look at the electrical systems around you. You might not know it, but from power plants with towering smokestacks to wires across the nation, the grid is changing faster than ever before. When utilities make investments approved by state regulators, the cost of the investment plus a reasonable ROI is spread out over the useful life of the equipment and bundled into your electricity rate. However, this traditional model of cost recovery does not support utility adoption of advanced energy technologies.
In this post, we’re taking a closer look at new technology being deployed in the transmission sector. We will focus specifically on how the federal government can influence what is nominally a local and regional issue.
Like a brilliant new TV show, new energy technologies must run the gauntlet of the pilot phase, soliciting interest from utilities and developers. In the electric industry, piloting new equipment can be particularly difficult because new, advanced energy-technology pilots must demonstrate that deployment won’t compromise the stability of the electric grid.
On social media and at industry conventions, it is easy to find high-profile discussions on the technological revolution of electric grids. Experts on energy storage, distributed generation, and wireless options describe how emerging technologies are poised to transform the electricity sector. The hype is real. Energy companies are developing technologies at an increasingly rapid pace. But for all the attention on these new devices and expectations of market growth, there’s still no clear path to widespread adoption. As this series shows, several key barriers prevent technology adoption from keeping up with technology development.