The ELECTRIC POWER Conference in New Orleans this year was an incredible experience. The keynote speeches and executive roundtable on Tuesday morning was a rare look into the minds and strategies of major utility CEO’s. After leaving these keynote speeches, it was hard not to be inspired to be a part of the future of electric utilities.
Leo Danault focused his talk on managing disruption; ignorance here is not bliss, instead we need to embrace and adapt the coming challenges. Danault is confident given the responses he has seen to hurricanes in Louisiana, where seemingly impossible feats were accomplished when the need arose. From these disasters, the need for a more decentralized system became much more apparent.
Up next to speak was Scott Bolick, the Head of digital strategy for GE, where they are thinking really big! Bolick started out his talk looking at Amazon, Google, Airbnb, and Uber; he believes that if people within the utility industry don’t act, new “unicorn” startups will be filling spaces that might not yet exist. Bolick and his team at GE are working tirelessly to make sure the software side of the business, which he believes will become more valuable from the physical assets, operates in a way that drives bottom line results through efficiency improvements from immense data modelling capability. The future that Bolick envisions is one that is highly integrated across thousands or millions of assets. For example, the solar panel on the rooftop of one’s home combined with their electric vehicle will be communicating with a local power plant to optimize outputs in a cost effective manner. Bolick painted an exciting picture for the future.
The second round of talks for Tuesday morning was an executive roundtable with CEO’s from 3 major utilities or energy companies. While this talk was planted firmly in the here and now, rather than the next 20 years, there are some big problems that need to be solved in the interim. There were four key takeaways from these roundtable talks:
1. The replacement of an aging fleet of power plants is not concerning, as the ones being constructed today are significantly more efficient with the same capital cost.
- An existing fear is how to manage the transition in a period of low demand growth - they expect it to be 1% annually. I personally think the demand growth predictions are incredibly bearish but they are certainly grounded in fact.
- While there were few things the roundtable vehemently disagreed on, there was one point that they resoundingly agreed upon: the importance of diversity in power sources. They all felt that one of the key reasons we will have coal in the future is to protect from rising natural gas prices. Again, because I live in the future, I would like to think that the next generation of nuclear will solve the majority of the problems from earlier generations. They look at it like a portfolio of stocks: you wouldn’t bet on a single company so why bet on a single fuel.
- The power source diversity comes with one caveat: if you don’t have diversity, you own the entire production process. For utilities this means owning operations from pulling the natural gas out of the ground to selling it to consumers. In this way, all costs of the supply chain can be controlled and the final product can be sold reliably and consistently to the end consumer.
As the morning of talks concluded I left the conference centre to find a local New Orleans spot to grab a bite of fried alligator, my brain racing with ideas and full with learnings. I had a rare glimpse into the mind of utility CEO’s and executives to see their vision for the future and what an experience it was. I was incredibly fortunate to be able to attend the conference and see all that I saw. Thank you Student Energy and Electric Power for the incredible opportunity!