Utility executive reveals amazing new fuel
By Bill Settlemyer
President and CEO, Setcom Media
Wow! That’s some headline, right? Sounds like something off the front page of a tabloid newspaper, but it really sums up a recent article by The New York Times columnist Thomas Friedman about a proposal from Jim Rogers, chairman and CEO of Duke Energy.
According to Friedman, Rogers is proposing to “turn the electricity/utility industry upside down” by rewarding utilities for reducing their customers’ energy use. The traditional model compensates utilities for investing in the generation of more power and then selling that power in response to rising demand.
“Energy efficiency is the ‘fifth fuel’—after coal, gas, renewables and nuclear,” says Rogers. “It should be our first choice in meeting our growing demand for electricity, as well as in solving the climate challenge.”
In my conversations over the last year with energy company executives, I’ve said that I anticipated a paradigm shift like the one being proposed by Rogers. I think the Duke Energy executive is on the right track, because changes in public policy that place severe restrictions on carbon emissions are likely if not inevitable.
I’ve also said that this kind of dramatic shift in the business model of utility companies has to take place as a partnership between government, businesses and consumers. We all have a responsibility to make this change work for all of us, including the utility companies.
No amount of conservation is going to make the demand for electricity go away. To cite just one very obvious example, the South would be a different (and emptier) place without ubiquitous air conditioning.
The good news is that it is possible to achieve far greater energy efficiency and still stay cool, keep the lights on and enjoy the other modern conveniences brought to you through the magic of electricity.
The somewhat sobering news is that this shift to energy efficiency won’t be cost free. It will involve incentives to spend more up front to make homes and businesses more energy efficient. One of the key points made by Jim Rogers is that utility companies are uniquely positioned to make energy conservation happen on a scale that will significantly reduce overall carbon emissions. They are, after all, the energy experts.
That said, if Rogers’ proposal is to become the industry norm, energy companies will have to create entirely new business models requiring teams of sophisticated, high-tech knowledge workers in numbers large enough to allow these companies to become “providers of energy efficiency.”
In summing up my views for energy executives, I’ve said that I foresee a new era for their industry that will be “difficult and challenging but also exciting and energizing.”
That’s still how I see it. I also agree with Thomas Friedman’s views on the capacity of “going green” to unleash an incredible and long-lasting technology boom that will benefit companies and investors prepared to take the leap into this new business sector.
IBM plays traffic cop
Another column by Friedman gives an example of how one technology company is already finding profit in helping cities cut carbon emissions and traffic congestion. I think you’ve probably heard of the company. It’s IBM. They are helping the city of Stockholm, Sweden, implement “congestion pricing” to control the volume and flow of vehicular traffic into the city.
IBM’s system for Stockholm requires a lot of technology: Cameras and sensors to record traffic and the travel of individual vehicles, complex software and massive data centers to set congestion pricing and optimize traffic flow. According to Friedman, a seven-month trial of the system has reduced traffic in the city by more than 20%.
New York Mayor Michael Bloomberg is trying to bring this system to New York City, saying that the hours spent commuting would go down and citizens’ time for leisure or productive work would go up.
With his record in private industry, Bloomberg probably has more “street cred” with the business community than any other mayor in the country, if not the world. Not exactly the kind of guy that you can stick the “tree-hugging, Birkenstock-wearing environmentalist” label on.
What Bloomberg is doing is being a good pragmatist, trying to look to the future and position his city in terms of livability, economic viability and control of carbon emissions over the long term.
How about us?
I recently talked to someone who was having trouble luring new employees to the Charleston area. Two of the key issues were housing costs and traffic congestion. To find affordable housing, people are living farther away from the places where they have to work (a common problem in growing communities around the country). And because of the long commutes and limited road systems, they find themselves stuck in hour-long commutes.
Is congestion pricing an answer for our region? Not a chance, you might say, since we fought like cats and dogs against the idea of a toll for the Ravenel Bridge. But times and circumstances change. Whether or not congestion pricing is the answer, there are certainly ways to use smart incentives, technology and good planning to manage traffic congestion.
With more workers being able to work from home and more automation in factories and warehouses, do we need everyone to come to work at the same time for an eight-hour shift?
Could “smart technology” (running at Google’s data center?) help working moms and dads plan more efficiently to move kids to school and after-school activities and themselves to and from work and errands?
These are the kinds of questions we should be asking. There’s a saying that “when you’re a hammer, everything looks like a nail.” We need new tools and new solutions for the challenges facing our region, our nation and the planet. Will we take up the challenge? If we
don’t, shame on us.
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