I have to admit: it’s hard for me to be terribly enthusiastic about electric utilities. I know a fair bit about them; by my count, I’ve served about ten utilities in various consulting roles during my career.
While generalizations are always dangerous, for the most part, I think it’s safe to say that electric utilities can be characterized as highly protective of the status quo. Utility executives and employees are typically competent, and take their mission for “keeping the lights on” very seriously, but they tend to be averse to change — the opposite of visionary.
For those of us who are trying to forge a new and better future, who see the eventual emergence of new and more environmentally-friendly technologies as natural and unstoppable as water flowing downstream, utilities can be large boulders in the river.
So it was with some skepticism that I began reading a couple of recent articles about the technology deployment efforts of San Diego Gas & Electric (SDG&E), an operating unit of the utility holding company Sempra Energy (NYSE: SRE).
In August, Power presented its 2012 Smart Grid Award to SDG&E, largely for its smart grid deployment plan (SGDP), which (in its own words) “empowers customers, increases renewable generation, integrates plug-in electric vehicles (PEVs) and reduces greenhouse gas emissions while maintaining and improving system reliability, operational efficiency, security and customer privacy.”
With this plan, SDG&E is aiming to enable a “smart customer” that is able to make more choices and have more control over energy decisions, a “smart utility” that manages a host of ever-advancing supply- and demand-side resources and the grid that integrates the two, and a “smart market” for customers and energy suppliers that preserves power quality and reliability on the grid while increasing price transparency.
In a separate article in EnergyBiz, a Q&A with SDG&E’s President & COO Michael Niggli reveals how extensive the SGDP roll-out has already been in San Diego. All customer meters — 1.4 million electric, 850,000 gas — have been upgraded. 18,000 rooftop solar units totaling 138 megawatts (3% of peak demand) have been installed. 1600 PEVs are driving around town and plugging-in at various charging stations, bringing new meaning to the phrase “San Diego chargers”.
On top of this, a host of other less-visible advancements — extensive deployment of updated SCADA systems, weather sensors, wireless communications infrastructure — are bringing the grid in San Diego out of the 20th Century to the 21st Century.
All of this will help SDG&E meet the goal of supplying 33% electricity of its electricity from renewable (mostly intermittent) sources while also accommodating potentially 200,000 PEVs by 2020 — which would be difficult if not impossible to achieve without advanced technologies such as those being deployed as part of the SGDP.
As impressive as this all is — and kudos to SDG&E for their accomplishments — it should be noted that San Diego citizens and California regulators were critical to this outcome. SDG&E may have rolled out the SGDP effectively, but they may not have developed the plan at all unless there was strong push and pull from outside forces.
San Diego residents have been very proactive in installing new renewable and efficiency technologies in their homes, and have been actively seeking engagement with SDG&E on how to get the most benefit from them. In Sacramento, California”s ambitious set of energy policies — a renewable portfolio standard (RPS), greenhouse gas reduction legislation (AB32), distributed generation goals, demand response mandates, and improved building and appliance efficiency standards — made it untenable for SDG&E to stand still with aging equipment based on decades-old technologies.
Lacking these external forces, I doubt that SDG&E would have made anywhere near as much progress in the smart grid and wouldn’t be far ahead of most other U.S. utilities, who do generally lack these forces.
The moral of the story is that electric utilities, as regulated companies, are reactive rather than proactive. SDG&E should be applauded for being highly responsive, but let’s not confuse that with being visionary. Indeed, it’s naive and maybe even unreasonable to expect utilities to be visionary. All we, as cleantech advocates can do, to “get” utilities to “get it” is to ensure that there’s enough outside pressure for them to “get it”.
If more places across the U.S. were more like San Diego, the transition to the cleantech economy would probably be further along than it is.