No More Excuses, Utilities

Interconnection is the most arduous, meticulous process of any renewable energy project. The simple reason is utilities do not want IPPs and Distributed Generation. Many utilities hide behind rational arguments against common renewable energy incentives like Net-Metering stating these systems are not directly offsetting the local power consumption. Simply put, someone with solar energy on their house is not sharing the costs of the grid at the time they are truly utilizing it in the early evenings during residential peak demand. As a result, someone without solar energy will be "punished" when the utility has to raise the price of electricity to compensate for the lost revenue from IPPs. Meanwhile, increased electricity tariffs make solar energy and other renewable technologies more attractive perpetuating the polarity in the debate.

The reality is utilities are not making money from clean tech, they are loosing money. A myriad of large North American utilities can absorb losses associated with 20% renewable energy by 2020, but imagine a small, privately held monopolistic utility volunteering to sacrificing 20% of its revenue for the greater good.

When a single utility owns the grid without checks and balances, the interconnection policy can be as convoluted and costly to the renewable integrator as the utility demands. Even if the government of a particular SIDS wants to achieve fossil fuel independence, the a-political, foreign owned utility does not have to abide. Importing oil at obnoxiously high and variable prices only affects the costs that are directly passed onto the rate-payers or the government as a fuel cost adjustment. There is no incentive to deviate from the current paradigm.

Regardless, around the world and even in the Caribbean, we are seeing Utilities willfully participate in changing the future of energy. As mentioned in a previous post, Aruba's utility has signed on to 100% renewable energy by 2020. With the introduction of a grid upkeep fee and a unique Net-Billing policy focusing on avoided-cost savings, the utility will not loose a significant portion of profits. A nearly identical policy has been introduced in Arizona- A "grid-usage" fee for APS net-metering customers will be applicable for all systems installed after January 1st, 2014.

One of Germany's largest utilities RWE has admitted defeat and embraced a new model to adapt to the changing marketplace focusing on "creating value by leading the transition to the future energy world." They want to become a "Project Enabler" and a leader developing large utility scale renewable energy projects across Europe.

Other progressive utilities, poised to remain afloat amidst the energy revolution, will explore storage technologies, frequency regulation, and smart grids to profit from the intermittency and effective integration problems associated with distributed, non-base load renewable energy.

As the world's energy mix becomes cleaner, some utilities will indefinitely be left behind as nothing more than an O&M provider for transmission lines while others will lead the charge forward.

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