Utilities survive challenges of future grid by becoming “enablers,” CenterPoint CEO says

scott prochazka elp

TULSA—Some futurists might imagine a post-utility future, where all power generation is renewable and neighborhood-sourced and balanced by energy storage. Decentralization will make the historic power company all but obsolete.

Not so fast, CenterPoint Energy President and CEO Scott Prochazka said Wednesday during a speech at the University of Tulsa. Not only will utilities find a way to integrate baseload and renewables and make the most out of transmission assets, but they also should become a facilitator of all of these newfound choices, in his opinion. Customers most likely don’t want the weight of an entire power system on their backs.

“I can’t imagine what it’s like to maintain the solar array on my roof,” Prochazka told a packed crowd at TU’s Friends of Finance Executive Speaker Series. Those who want to embrace clean energy are “interested in finding ways to do so that don’t complicate their lives.

“The utilities, quite frankly, are going to be the enablers to get that done.”

Houston-based CenterPoint Energy is one of the biggest players in Texas’ deregulated electric and gas utility markets. It serves millions of electric customers in the Houston area, as well as natural gas in Texas and five other states, including as far north as Minnesota.

One of its biggest innovations, recently honored by POWERGRID International as its 2016 Grid Optimization Project of the Year, was its Advanced Metering and Intelligent Grid Initiative which was completed with the help of vendor ABB and the U.S. Department of Energy. The project involved installing 31 substations and 859 intelligent grid switching devices on more than 200 distribution circuits.

“It allows us to identify a failure point, isolate it and re-route power around it,” Prochazka said. The effort has helped CenterPoint avoid more than 100 million outage minutes since it started work in 2011, according to reports.

Thanks to smart meters, sensors and switching devices, the power grid is becoming more reactive and data-driven every year, he added. This technology will help utilities—at least those who adopt them—stay on top of the future changes and integrate them into the overall structure. In this sense, he thinks of the word “enabler” as a good thing.

Renewable energy sources will continue to grow in market share by 2015, the CenterPoint CEO predicted. And he called energy storage “the Holy Grail” of the industry, although it’s not currently cost-effective without incentives or subsidies. Microgrids—those sometimes independent power “islands” which incorporate renewables like solar photovoltaic, large-scale batteries and backup generators—as growing in adoption, but viable only where they serve a specific purpose.

Costs are coming down for solar PV and other emerging technologies. Thus, customers will continue to add arrays or turbines but want the security of a stable supply of power.

“The grid is going to have to be a facilitator for people making choices whether to stay on the grid or off,” Prochazka said.

Prochazka identified several levels of market environments for emerging technologies. “Central planning is one, such as New York’s “Reforming the Energy Vision” (REV) program in which the government gives utilities and renewable players express direction on how to proceed with green energy efforts. Another is incentives, such as California does with net metering and other encouragements to solar adoption. The U.S. Department of Energy’s Smart Grid Grants was an example of infrastructure incentives and “technology rich” solutions are pushed along by regulatory factors.

Market based was the final environment listed by Prochazka, as he pointed toward Texas’ deregulated markets. Market-based solutions are enacted where they make the most sense economically and not by regulation or tipping the scale in favor of a particular source. And, he added, energy efficiency is the most cost-effective generation there is, thus utilities need to employ data scientists and other tech-savvy workers to make sense of all this data coming from smart meters.

Utilities should have no fear of the future if they adapt. At the same time, they cannot forget what and who brought them there.

“I believe utilities are exciting, technology-rich places to work,” he said. “And we’re going to continue hiring linemen and pipefitters, too, as many if not more.”

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