The Luna Ring Project aspires to install a belt of solar cells across the Lunar equator. The power generated will be beamed from the near side of the moon and fulfill all energy needs of the world 24X7. This might sound the death knell for utility companies: but even without this anticipated change, traditional utility companies have enough challenges to deal with today.
Distributed generation would mean the rise of prosumers (producer-consumers) and a much more dynamic relationship between the utility and its consumers. The smarter equipment at your home with the capability to communicate with the rest of the world, can help you control utility consumption more effectively without compromising on convenience.
In fact, in the US, 11% of the installed thermostats can communicate over the internet, and this number is growing. Customers increasingly have independent control over both energy sources as well as energy consumption.
Let us look at some interesting developments. Google has now bought Nest and the business integration is headed by one of the ex-chiefs of EnerNoc, the power company that is a leader in demand-response technology and services. It is no wonder that Google is considering a demand response play. But the interesting twist is that several markets in the US are mulling capacity markets. The play of demand response is more relevant for capacity markets.
Are we soon going to see Google as a significant player in energy markets? Will utility players compete, cooperate, or co-opt? Interesting Business to Business to Consumer (B2B2C) model possibilities exist.
The other key point is regulation. Are we going to see a reduction in the need for regulators? During the polar vortex last winter, Duke Energy used technology to reduce the end voltage by 4 percent, thus reducing consumption and avoiding any major outage. Are we going to see more such regulatory funded projects or will regulators use other competitive mechanisms to control consumption during such events?
To survive and grow, utility players need to invest in technology, forge closer connections with the customer/consumer (prosumer), and re-imagine their businesses to come up with new models and services.
We are looking forward to an interesting three hour session in Cincinnati, during the TCS Innovation Forum-North America, where we will discuss the future of Utilities.
See you there! Also, watch this space for more from Cincinnati.