COMMENTARY
A famous baseball player and noted grammarian once said, “You’ve got to be careful if you don’t know where you’re going, because you might not get there.”
It can be especially difficult to “know where you’re going” at a time of gyrating financial markets, potentially rapid and significant climate change, and a major shift in national political leadership.
In terms of how our nation uses energy—and how that usage impacts our planet—it is especially important for us to know exactly where we are going and not to be blown off course, even amid sea changes in the economic, environmental and political landscapes.
It will require clear vision and political fortitude to make the necessary trade-offs we undoubtedly will confront, but we must remain focused like a laser on three key priorities: making America the most energy-efficient nation in the world, moving to low-carbon electricity and decarbonizing our transportation fleet using electric vehicles.
Achieving higher levels of energy efficiency must be priority one. That requires new ways to control energy usage, cost and environmental impact. Energy cost is becoming especially important as our nation descends into what many experts believe will be a sharp and deep economic downturn.
Providing better information about how we use energy is essential to achieving higher levels of energy efficiency.
Today, when we get our electric bill, it’s as though we had gone to the grocery store and filled our cart, and the cashier calculated our bill by weighing the cart and multiplying that weight by the average cost per pound of everything in the store—regardless of whether the cart was full of champagne and caviar, or beer and pork rinds. Then the store sent us a bill—a month later—telling us only how many pounds of groceries we bought and the amount due.
If we are going to effectively control how we use energy, we need better and more detailed information. Once we have that information, we need intelligent controls to make it easy for us to manage our energy usage wisely while maintaining comfort and convenience. We don’t want to get up at 1 a.m. to run the clothes dryer to save a few cents because electricity costs less at that hour. We want that to happen automatically.
Many utilities, including Duke Energy, have begun to upgrade their electric delivery systems using intelligent sensors, control technologies and communications systems that support energy efficiency through automation and detailed customer usage information.
But much more is required to meaningfully change America’s relationship with its energy consumption patterns.
For the past 100 years, our relationship with our electricity usage and billing has been based on an average “cents-per-kilowatt-hour” metric (very similar to the pounds of groceries in our cart).
The cents-per-kilowatt-hour—or “one size fits all”—method fails to take into account whether electricity is consumed when the costs of providing it are high vs. low. It also fails to differentiate between electricity use that is efficient versus wasteful.
The cents-per-kilowatt-hour model also encourages utilities to sell ever-increasing amounts of electricity because that determines how much they get paid. Simultaneously, the model discourages utilities from aggressively investing in energy efficiency because doing so reduces revenue.
An energy efficiency program such as Duke Energy’s proposed “save-a-watt” plan changes that equation. Save-a-watt enables the utility to meet electricity demand more cheaply than by building new power plants, saving all customers money. Those customers who actively participate in the program save even more through lower electric bills.
Save-a-watt provides an incentive for the utility to aggressively invest in energy efficiency because the company’s financial return on the electricity saved would be nearly as much as its return had it built a power plant to provide that electricity instead. The proposal is under review by utility commissions in four states served by Duke Energy (North Carolina, South Carolina, Indiana and Ohio).
Improved energy efficiency will help decrease carbon emissions, but it won’t be enough.
We also must rapidly commercialize and reduce the costs of technologies such as roof-top and distributed solar generation. That requires increasing demand to stimulate competition and scale among technology developers and manufacturers.
In North Carolina, state utility regulators are reviewing Duke Energy’s proposal to invest $50 million in distributed solar generation. The program would encourage commercial solar development while creating a new, carbon-free source of electricity for our customers.
Duke Energy also is active in the development of a low- or zero-carbon electric transportation fleet. Most major automakers plan to bring plug-in electric vehicles to market within the next two to four years. As the vehicle battery technology needed to provide low-cost electric energy advances and costs drop, our nation will have the opportunity to replace CO2-emitting internal combustion engines with electric propulsion.
In the end, it is technology in the electricity sector that will allow us to create a secure, low-carbon future—a future in which we will have much better information about, and control over, our energy usage.
We know where we need to go. If we stay the course and muster the political fortitude to make the inevitably necessary trade-offs, we just might get there. Of course, by the time we get there, to paraphrase a master, “the future ain’t gonna be what it used to be.” It will be better.
—Jim Rogers is chairman, president and chief executive officer of Duke Energy and David Mohler is chief technology officer at the Charlotte-based utility.
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