HOUSTON-The power generation picture used to be like a non-Dorian Gray portrait. Static, predictable and rarely changing.
Well, that portrait has gotten snap-chatted endlessly, cut into pieces and now evolving all the time. It may require years to truly understand where it’s all going.
CenterPoint Energy’s Gary Hayes predicted that a spirit of “coop-etition” among utilities and partners which will be most responsible for the shape of this next-generation electricity mix. He was talking about banding together during a panel on “The Future of Energy” last week at ABB’s Customer World event in the George R. Brown Convention Center in downtown Houston.
The event drew close to 10,000 people, and a sizable portion of those listened to Hayes and the other panelists describe the various challenges from several fronts in the new and ever evolving power generation dynamic.
The group covered a lot of ground, from utilities to vendors to end users and regulators. It included Hayes, who is chief information officer at Houston-based CenterPoint; Joe Kava, vice president of data centers for Google; former Energy Department Assistant Secretary Charles McConnell; and Claudio Facchin, president of the Power Grid division for ABB.
Innovation and speed will carry the day toward victory, as always, but this uncertain future makes it difficult for energy companies. This sector is not always quick to give out a do-over.
“It’s very difficult to innovate in the energy space, because it’s an incredibly capital-intensive business,” said McConnell, who was DOE’s assistant secretary for fossil energy for several years ending in 2013, later to become executive director of Rice University’s Energy and Environment Initiative. “That’s why the industry has a tremendous burden on itself.”
Kava represented the environmentally conscious corporate element which is also very conscious of its buying power. Google is committed to powerful its vast, energy-hungry data centers with 100 percent renewables and likes the certainty of long-term power purchase agreements (PPAs)
The company, whose parent Alphabet’s market capitalization is comparable to Microsoft and Amazon, demands clean energy options but possesses the buying power to make major wind and solar projects happen at scale. Google has engineered deals in Tennessee, Alabama and even Taiwan lately to spur creation of utility-scale wind and solar farms.
“You can either partner with us or be left behind,” Kava said. “For the ones who partner with us it works out.”
Accounting for every cost makes it in a company’s best interest to know what its long-term fuel costs will be. To which he added. “And as far as I know the sun and the wind are still free.”
Of course, it’s not that simple. Utilities must deliver reliable, quality power and know how to smooth out the intermittencies of weather-related energy sources. This brings other factors into play such as digitization, control technologies, energy efficiencies and, yes, traditional resources such as coal and gas-fired generation.
“It’s not a race to renewables; it’s a race to lower carbon emissions,” the former regulator McConnell noted. “We’re not going to throw the coal out with the baby and bathwater.”
The power generation mix’s “all of the above” approach is not going to evaporate in the short term, he pointed out. The economics are tilting in clean energy’s favor for the time being, however, and utilities are retiring coal-fired plants, while also building units fueled by low-cost natural gas.
Plants and equipment are still at the heart of capital projects. ABB’s Facchin underlined that historical point, while noting that the game changer in operations is software, analytics and emerging technology such as artificial intelligence.
“No doubt that mission-critical physical infrastructure and investing in technology is at the core,” Facchin said. “We need copper and iron to transform the electrons” and breakers that come with embedded intelligence to optimize the capex.”
No matter how much is spent on what, the coming generation mix will be more diverse than ever, not only in resource but point of origin. This would include rooftop solar power moving through a bi-directional grid, as well as utility-scale conventional and renewables. That energy could move from turbine to substation to customer, or from peer to peer via blockchain-activated transactions.
“We look to move from an energy grid to an energy internet,” CenterPoint’s Hayes said.
(Rod Walton is content director of Power Engineering and POWERGEN International. He can be reached at 918-831-9177).
