This article is part of a series of insights from leading smart-grid, clean-energy, and utility experts speaking at gridCONNEXT 2017 in Washington D.C., December 4-6. Questions asked by Clean Edge managing director and gridCONNEXT co-chair Ron Pernick.
Ron Pernick: You spent nearly five years as an Illinois utility regulator from early 2012 through the beginning of 2017. What was your journey to that position/role, and what would you say was your greatest accomplishment?
Ann McCabe: Becoming a state utility regulator was the culmination of 20 years of energy and environmental policy and regulatory experience. I had held positions in state government, a large corporation, and a non-profit; served on boards; and built an extensive network. When I became a utility regulator, it was a return to Illinois state government. Early in my career, I was a budget analyst and then a commissioner’s assistant — before restructuring and retail choice were hot topics. Back then the big dockets concerned whether recently built nuclear plants were “used and useful.”
As a commissioner my greatest accomplishment was helping implement 2012 smart grid legislation, also known as the Illinois Energy Infrastructure Modernization Act, or IEMA. The $3.2 billion investment in the grid and advanced meters by the state’s two primary electric utilities over a number of years have already added resilience and reduced outages. In the future, customers should see more AMI-enabled services and applications to manage their energy consumption and bills.
Pernick: Mainstream news headlines are full of grid-related technology breakthroughs — energy storage, blockchain, EVs, DG, and more. As a former regulator, what would you say are some of the greatest innovations occurring in the regulatory and/or policy realm?
McCabe: Exciting technology innovations include the growth and potential in distributed energy resources, from renewables and efficiency to electric vehicles and storage. Smart devices and services can help customers manage consumption and bills, and new technology makes the grid smarter and “self-healing.” Devices like “smart plugs” charge electric vehicles when costs are low. Autoreclosers (a special circuit breaker which can reset itself automatically) can redirect electricity on the grid during outages and result in fewer affected households and quicker recovery. And I believe that large- and small-scale applications for energy storage will be a real game changer.
Pernick: The new DOE Grid study is out, and it points to natural gas as the major driver for baseload power plant retirements. Not surprisingly, lower-cost and cleaner sources of electricity, namely natural gas, wind, and now solar, make up the vast majority of new electricity generating capacity additions. Do you see this trend changing anytime soon (and, as some might wish, do you see a U.S. rebirth in coal and nuclear)?
McCabe: Growth in renewables will continue. Solar and wind have become more economic. For the near term, the intermittency of renewables will continue to be an issue, and natural gas will continue to play a large role given its cost and ability to ramp up quickly.
The future of nuclear is less clear. Recent premature closures of nuclear plants is concerning because they provide reliable baseload power, carbon-free emissions, and fuel diversity to the generation mix. That said, low natural gas prices and high fixed costs make it difficult for some nuclear and coal plants to compete, especially as merchant power in restructured states. Looking ahead, scalable small modular nuclear reactors have great potential globally. NuScale plans a commercial SMR at Idaho National Laboratories for the Utah Associated Municipal Power Systems. I believe it’s critical that the U.S. remain a leader in nuclear energy technology while carefully addressing the storage of spent nuclear fuel.
Pernick: You’re currently the acting interim executive director for The Climate Registry, a non-profit organization that works with states, provinces, corporations and other organizations to reduce their carbon footprints via carbon measurement, reporting, verification, and other activities. How do you see climate-related drivers influencing utility decision-making going forward?
McCabe: The investment community increasingly wants to make informed decisions on capital allocation on factors including risk posed by climate change. In addition to mandatory greenhouse gas emissions reporting to U.S. Environmental Protection Agency by large sources, many utilities track and report extensive greenhouse gas emissions to a variety of entities. One of The Climate Registry’s mantras is “you can’t manage what you don’t measure.” Greenhouse gas accounting is extending to the supply chain, which will lead to additional reductions by suppliers.
In July 2016, dozens of institutional investors submitted letters to the Securities and Exchange Commission requesting quick action to require stronger reporting of sustainability risks such as climate change, water scarcity, and global deforestation. We’ll see a continuing emphasis on decarbonization at the global level and by a growing number of cities and states.
Pernick: Looking out 2-5 years, what do you expect to be the biggest changes likely to impact the utility industry (especially in states and regions leading the charge to a modernized grid)?
McCabe: Integration of distributed energy resources, particularly renewables, will continue to be a big challenge. States and regions will learn from the experiences of Hawaii, California, Texas, Nevada, and others.
Clean Edge estimates clean energy accounts for 2.4 million jobs in the US, and Advanced Energy Economy says advanced energy is a $200 billion US market. That’s significant. In states implementing advanced metering and grid improvements, customers need to be educated about the benefits of advanced (smart) meters. Debate will continue over who has access to the data generated by advanced meters and whether the energy efficiency programs should be evaluated based on deemed (estimated) or actual savings given real-time metering abilities. In the years ahead, regions with modern grids should meet the coming challenges more effectively and efficiently.
This article was originally published by Clean Edge and was republished with permission.