Looking into the Crystal Ball
Dr. Joe Hoagland, vice president of Enterprise Relations & Innovation for TVA—the largest public power utility in America—shares his thoughts about the future of the utility industry.
FEBRUARY 3, 2017—In a world where just about everything runs on electricity, TVA’s Vice President of Enterprise Relations & Innovation, Dr. Joe Hoagland, is tasked with ensuring the largest public power utility in America is ready to deliver low-cost, clean energy to the 9 million people of the Tennessee Valley in the right amounts and at the right time. We sat down with Dr. Hoagland to capture his thoughts about the future of the utility industry.
Where do you see the utility industry in the future?
The good news for consumers is that generation trends are moving toward a more resilient and flexible energy supply. While we [utilities] are experts at predicting and modeling consumer demand, we need to create generating resources that can turn on and off quickly to take into account the increased penetration of both intermittent sources—wind, solar and so on—and distributed resources that may not have been installed or managed by the utility. Doing so will help keep costs as low as possible. To get there we will need more sensors and improved communication/control networks to optimize grid performance.
Overall I’m optimistic for the utility industry. At TVA we have a diverse, cleaner energy mix than we had just five years ago and are evolving into a more dynamic system of resources that can provide flexible loads to meet needs of a more informed consumer. Technology is a key driver of this evolution. To take full advantage of the technology evolution, we need to put more emphasis on data collection and analysis to capture all of the benefits and reliability of our power system, whatever form that system may take in the future.
How are renewables empowering consumers?
Renewables—and I would include energy efficiency in that mix—are disruptive technology for the industry. With almost 20 percent of our energy capacity in renewables and energy efficiency, we look that this disruption as a positive.
The fact is, renewables represent a large portion of the total installed power supply nationwide. This is because some consumers want clean energy, the cost for solar panels continues to decline and improvements in wind turbine design make that resource more competitive. To meet the need, we recently commissioned a 75 megawatt solar facility in Florence, Ala., that can power 15,000 homes and eliminate about 105,000 tons of CO2.
Unlike ever before, consumers have the power to reduce their carbon footprint and lower their monthly bill. With a swipe on my smart phone I can turn on or off the lights and appliances at my house. If I forget to turn down my thermostat, no problem, I just pull out my phone. Consumers are looking to utilities to help them become more energy efficient.
How are renewables affecting the utility industry?
To give consumers what they want, we are making investments for a greener future. Over the next 20 years we are investing approximately $8 billion to enhance our cleaner, efficient, low cost, renewable energy portfolio—including solar, wind, hydro and bio gas. As consumers demand renewable energy to meet sustainability goals, offering carbon-free energy sources, including nuclear, provides tremendous health benefits and economic development opportunities for the Tennessee Valley. Right now 55 percent of the electricity TVA produces is carbon-free. By 2026 that number will jump to over 60 percent.
For TVA, we are seeing load growth that is essentially flat for the foreseeable future, despite tremendous economic growth across the Tennessee Valley. Therefore, new renewable generation additions must be carefully implemented to maintain our low cost, 99.999 percent reliability requirement as we replace capacity for facility retirements or contract terminations.
Bottom line: renewables and energy efficiency offer opportunities to continue our trend toward a cleaner, more flexible generation mix and offer consumers the clean energy they want.
How will energy storage affect the power system?
In terms of battery storage, Volta invented the first true battery in 1800. It’s only in the last few years that battery technology advancements have made them a staple of everyday life. We are seeing energy storage prices continue to decline, especially battery storage (lithium ion chemistry).
As costs decline, utilities can use energy storage devices to help manage and smooth renewable production, address frequency regulation and voltage support needs and provide fast ramping services to businesses. TVA and our local power companies are exploring storage projects on both the distribution system and the transmission grid to better understand operating characteristics and to be able to more fully quantify the benefits of energy storage.
On the individual consumer level, smaller scale storage devices like the Tesla Power Wall will continue to improve in terms of cost and performance, making this type of storage a growing preference for customers who want to manage their energy supply and minimize their power bill.
At TVA we can’t stand still. We must think beyond the battery. In the ‘70s we built the Raccoon Mountain Pump Storage Facility—essentially a 1600 megawatt, 1 billion gallon water battery outside of Chattanooga. Today, inventors are creating new storage technologies, like flywheels and grid-connected water heaters. To balance load at night, we are testing water heaters that superheat water at night and turn off during the day to conserve energy during peak demand periods.
Looking forward, we must stay abreast of the expanding energy storage technologies to capture the opportunities in order to bring more value to our consumers. We’re confident we can do that.