Figure 2.3: The World Bank on Climate Change

Final Years: 2023-2033/The Lumpy Implementation of the Advanced and Clean Technology Power Industry

Managing peak demands on transmission grids now has aspects that look like high-tech video games with some attendant emotional shocks for managers as weather conditions change. With all of this there is now clear and unrelenting movement toward a long-term environmentally sustainable power system, not only in the U.S., but globally. U.S. leadership in developing clean technologies boosts the national economy as the nation is the world leader in innovation and exports.

The ongoing electrification of the U.S. economy matures during these latter years. Growing integration of the automotive sector with the power sector finds people charging their vehicles during the day or night, but often with sensitivity to prices communicated via smart systems. Consumers take so much pleasure operating their vehicles, especially when the fuel monitoring systems in the vehicles show the net use of a gallon of gasoline with over 100 miles traveled. Oil prices remain above $100 per barrel due to global demand from developing nations.

An American and Chinese partnership on space-based solar power plants for research purposes represents a huge R&D investment for the future of clean power. While the plant ostensibly powers the International Space Station, the research eventually leads to promising applications for ground-based solar power. Advanced battery storage and fuel cell systems for the home market gain in popularity for drivers of hybrid electric vehicles. Short-distance DC power lines interconnecting power generation islands support system operations. Coal supporters advocate for the benefits of cost-competitive in-situ gas derived from coal, which leaves some of the carbon in place. Natural gas prices, higher than in years past, are expected to rise as the industry must try to access more difficult-to-recover reserves.

As the full policy support for movement toward a more balanced, cleaner, smarter energy infrastructure is put in place, defining a “balanced energy portfolio” evolves into a pressing issue. Power company executives from across the spectrum of services and assets classes agree that prices and costs must continue to be balanced with stewardship of the natural environment. An elevated level of information-intensive customer service is considered part of the basics of the business. Government and regulators leaders agree with power companies on improved core services. Providing those services results in the emergence of a modern, cleaner energy system, but with diverse patterns of energy investments in infrastructure at the state level.

Moving across states, a wide range of integrated power system assets thrive. Some states become considerable users of renewable generation, while others have more of a balance with natural gas. Some states have significant numbers of independent power islands, while others rely more on energy efficiency with most customers still reliant on the grid. Varying levels of integration with smart grid systems exist with some power companies having large numbers of tech-savvy consumer and industrial users of the systems, while others primarily use it to manage loads in the larger system. The slowness of some public power agencies to invest explains many of these variations across the country.

Even with some common features, a one-size-fits-all solution doesn’t quite emerge. WECC member states and provinces take diverse approaches with urban areas in California and British Columbia being on the high end of power system development, while rural parts of Washington State take a simpler approach. In many places, one can find a mix of different methods to meet energy needs. There are zero-energy and green buildings in many areas. Utility rate programs, which encourage efficient consumption, vary widely. Some programs provide special rates for certain kinds of equipment. The WECC transmission smart grid evolves to allow easy importing and exporting of power between states. This contributes to stable rates across the region. Zero net-energy regulations in some states support a range of technology options and result in new homes and some entire neighborhoods becoming models of energy efficient living.

Power industry investors and observers in the press argue for a rationalization (or setting of clear identifying boundaries) of the industry into distinct business models incorporating:

1. 
   Power generators (both renewable and traditional);
   
2. 
   Energy services providers;
   
3. 
   Smart systems providers and integrators
   
4. 
   Independent power network owners who incorporate distributed generation;
   
5. 
   Demand-side management and energy efficiency companies;
   
6. 
   Transmission service companies;
   
7. 
   Local distribution service companies; and
   
8. 
   Regional conglomerates or holding companies.
   

The short-term benefits to the environment of the shift in the electric power industry are becoming increasingly evident, even though climate change impacts from historical emissions have yet to run their full course (likely to take hundreds of years). Local air quality is improving and energy demand growth is mostly flat.

What is most evident as advanced energy technologies are being implemented is how much smarter and efficiently energy is being used compared to patterns in, for example, the late 1990s. More energy is being produced in an environmentally sound manner and closer to the point of consumption. People are smarter about energy prices and values.

As 2032 comes to a close and the new decade begins to take shape, the four major issues face energy players in the WECC region include:

1. 
   Should policy pressure supporting preferences for the clean energy industry dissipate now that many of the dirtier production practices have disappeared and the clean technologies are the industry’s standard?
   
2. 
   What will happen when the nation’s electric generation base moves to over 50% renewable power? Should the barriers for efficient power transfer and trading be removed on a nationwide basis despite States’ rights issues?
   
3. 
   How should consumers be protected from price and other risks in the more market-oriented power system? What services are now so basic as to be tantamount to a right for all consumers?
   
4. 
   Will there ever be a way to dramatically and further reduce fossil fuel use on a global basis since greenhouse gas emissions are still accumulating at a rate that risks severe climate impacts?
   
5. 
   What new utility business models will emerge as the transition from the traditional utility operating paradigm emerges?
   
6. 
   With an increasing reliance on digital technologies, smart grids and electrification of the transportation and industrial sector, how do we continue to increase power quality, reliability and protect against cyber-attacks?