By Teresa Hansen
POWER-GEN International’s keynote speakers on Tuesday morning focused on the transformational changes the electric power industry is experiencing. The panelists in Tuesday afternoon’s session titled “A View of the Electricity Business Model of Tomorrow” continued that theme. While each panelist had a different take on the future, they all agreed on some major points:
· Global demand for electricity will rise, driven by developing countries.
· Natural gas-fired generation will continue to grow.
· Coal-fired generation will decline as a percentage of the world’s generation fleet over time, but will continue to grow as China, India, and other developing countries grow.
· It will take a long time for the electricity generation system to transition.
The session’s panelists: Kevin Casey, managing director of Beaufort Rosemary LLC; Andrew Trump, director of management consulting at Black & Veatch; Brett Crable, director of new technology & energy conservation at Dominion Virginia Power; Jeff Brown, principal at Pangea Global LLC; and Nancy Svites, director of human resources at MPR Associates Inc., each presented to the standing-room only crowd, predicting how the next 15 to 30 years will unfold in the electric power industry.
Casey, Trump, and Crable all had a similar take on the future regarding renewables. They believe renewable energy’s share of the generation mix will continue to grow. Brown disagrees.
“Economics of renewables are driving its growth,” Casey said.
While subsidies are still in place for most wind and solar installations, and these subsidies certainly make renewables more attractive, even when they are no longer subsidized, renewables will continue to grow based on economics, Casey predicted.
He said that as these renewables are added to the grid, quick-start generation will become more important and the trend around building highly-efficient, gas-fired, combined-cycle plants will change.
“Natural gas power is no longer just about combined-cycle efficiency; it is shifting to quick-start units,” Casey said.
Independent power producers should think about providing needed services, such as quick-start ramping power, he said.
Trump spoke some about renewables and the “storm front” they are creating for distribution utilities. He outlined four drivers of change: integrating large-scale renewables and small distributed energy resources into the generation mix; stagnant kilowatt-hour sales; the need for significant investment in the electric power industry; and cost recovery mechanisms that are no longer adequate or equitable.
“One hundred billion dollars of investment capital is put into the U.S. power industry each year,” Trump said.
Utilities should carefully plan their investments. They must be careful not to overly plan for industry-wide challenges and issues, but instead each must look at their own unique challenges and make their plans accordingly, he warned.
Crable, the only investor-owned utility executive on the panel, agreed with most of the other panelists’ views, but focused his comments more on his company’s customers.
“Dominion is in the customer business—both gas and electric,” he said. “As we plan for the future, we believe that electricity will remain essential in our customers’ lives. It will define their standard of living and provide for their safety. It must be affordable and available to everyone, as well as reliable and safe.”
Dominion is moving toward personalized services because utilities are not necessarily the drivers of customer experience, Crable said.
“Customers will be empowered,” he said. “They want control, choice, and convenience. The way to earn customers’ loyalty is to be adaptive, leverage technology, and be the preferred provider.”
Brown began his comments by saying they differ from Casey’s. While he agreed with many of Casey’s comments, he is not bullish on renewables, especially solar.
“Gas combined-cycle generation is clearly a superior alternative for reducing carbon emissions,” Brown said.
While he believes wind, hydro, nuclear, and advanced coal are also options (in that order), Brown does not believe solar is a viable generation source.
“Better reliability trumps free fuel,” Brown said.
When asked by an audience member about his thoughts on energy storage coupled with renewables, he said, “Storage with renewables only makes them [renewables] more expensive. It’s that simple.”
The panel changed gears when Svites presented about the future workforce. She predicts that millennials will make up 50 percent of the workforce by 2020.
She talked about their views and expectations of the workplace and the need for the electric power industry to prepare for these highly-motivated and ambitious workers who are not comfortable with rigid corporate cultures and expect to move up quickly.
“If they don’t advance as quickly as they expect, they will move on,” she said.
She emphasized the importance of creating a plan to not only attract the future workforce, but a plan to retain them, too.
Although all panelists discussed challenges that lie ahead for the electric power industry, they did not create an atmosphere of despair and hopelessness. Instead they provided ideas and guidelines that will ensure the industry is ready and able to tackle the challenges that lie ahead.