Delegates and exhibitors gathered Tuesday at the San Diego Convention Center for DistribuTECH 2017’s Opening Keynote Session, where the theme was transformational change.
Speakers focused on the theme of transformation of the energy sector—both via technology advancement and by rapid regulatory changes.
Geoff Colvin, Senior Editor-at-Large for Fortune magazine and Author/Commentator on Business and Economic Issues began his speech by reading several news stories on the biggest energy storage projects, pointing out that the biggest projects didn’t stay the biggest very long at all.
Technology is moving faster than we can regulate, Colvin said.
“Every industry is unique, but at the same time there are certain themes across the economy that happen. One of these is the speed with which change is happening,” Colvin said.
Colvin used the handset game Candy Crush to prove a point about business models.
“If you can download it for free and play it for free, why did anyone bother creating it? You make it to a point where you just can’t make it. It’s too hard. At that point you can buy extra lives and levels. Obviously these lives and levels have no meaning outside the game, but you do spend real money for them,” he said.
“The company that makes Candy Crush went public and released its IPO and financials. And that’s when we learned people were spending $2.5 million a day on Candy Crush. Now if someone had come to you and said ‘I have an idea for a business,’ you would have thought they were out of their minds.”
Business models that we might have previously thought were crazy, might not be crazy, and we all have to remember that, he said.
Another significant theme across the economy is uncertainty, and Colvin used the White House as his example.
“If anyone had told you a year ago, or for that matter 3 months ago or for that matter on election day, that Donald Trump would be president” and this isn’t a partisan observation. His own election staff told the media that it would take a miracle for them to win,” he said.
The stock market, prediction markets, every model political scientists have did not predict Trump’s victory. This illustrates the uncertainty and unpredictability businesses have to deal with now.
“Nobody got it right. Our models just don’t work anymore. Our models for predicting what’s going to happen are just not good. They’re not working the way they used to. And that’s what makes this market so uncertain,” he said.
Audrey Zibelman, Chair of New York State Public Service Commission said New York has made an incredible amount of progress embracing changes.
“Change often happens after a major event and for New York, it was Hurricane Sandy, Zibelman said. “When you live in a vertical city, you understand what it means when someone’s grandmother may be trapped in a high rise, unable to get out, charge her phone or reach loved ones.”
She said utility companies can achieve deep decarbonization and do it in a way that keeps energy prices low, but the business model has to change.
“When I started in energy regulation, generation was king and transmission and everything else came in last place. Now things are changing. Distribution utilities could not continue to be just a wires business,” she said.
Utilities, just like other businesses, must change their role and help consumers use their product in a more efficient way, she said.
“When we talk about the future grid, we’re talking about moving from hours to milliseconds — where we have a dynamic read on demand and a dynamic operating ca[ability to meet that demand. It’s not just about the engineering and the tech. It’s about the business model,” she said.
Universal access for all classes is another goal utilities have to keep in mind as the industry changes.
“What we saw in broadband is a significant digital divide. What we can’t afford to do in electricity is have an energy divide. Providing energy literacy across the economic spectrum as well as providing economic pricing can help us prevent a digital divide,” she said.
Finally, she said, people shouldn’t expect that change is something that will happen in the distant future.
“When people used to ask me how long it was going to take to build all this up, I used to say 5-10 years, you know, beyond my time. But now I think it may not be that long,” she said.
Scott Drury, President of San Diego Gas & Electric, host utility of DistribuTECH 2017, said energy touches people’s lives in profound ways, from restaurants to biotech companies.
“At SDG&E our focus has been & will continue to be cutting emissions for cleaner air for our customers,” he said, adding that his company continues to outperform California standards — with 40 percent of its energy coming from renewable sources.
Enormous opportunities for the utility space exists in transportation, he said, both to make money and make the world cleaner.
“The transportation sector — moving people and things, he said — is still responsible for most air pollution. Half of the country’s electric vehicles are in California,” he said, adding that his own EV was parked in the garage downstairs.
He said forums like DistribuTECH, where we can come together and learn from each other are a great opportunity to improve the industry.