Mega trends form electric future

Five unavoidable ‘mega trends’ dictate the future of sustainable electricity generation on the planet, utility company executives were told at a regional conference held in Cayman this week.

Business consultant and author Mark Gabriel, speaking at a conference of CEOs of Caribbean electricity companies this week, explained that mega trends occur regardless of the state of the economy or government or corporate intentions.

He said mega trends, or ‘destinies’ impact the energy business worldwide, and it is vital that utility companies focus on those and ‘not necessarily on the daily market trends and fluctuations’.

Mr. Gabriel’s book ‘Visions for sustainable energy future’ outlines the five mega trends and he explained them to the delegates at the Electric Utility Services Corporation, or CARILEC, conference.

The first is carbon capacity conflict, under which renewable energy falls. ‘We as a society are trying to be more efficient, more conscious of our carbon footprint, more environmentally friendly. At the same time, capacity and demand for more electricity is going on.

‘At the end of the day, electricity is the answer to our problems, it’s not the problem … How do you balance the need for more electricity, higher quality electricity, higher reliability of electricity with our desire to have a lower carbon footprint?’, he said.

The second is intelligent infrastructure, also called the smart grid. ‘The idea there is we can add communications, computing and other intelligence to the electrical grid to make it operate more efficiently and in a more reliable fashion. That is where renewables come into play.

‘We have to have a balance between thermal generation, renewable and an efficient grid. We cannot rely solely on renewables to provide power. Wind does not always blow and the sun does not always shine, yet our demands for electricity are continuous.’

The third mega trend is demographics. ‘The challenge we have globally is having sufficient numbers of engineers and qualified people to build and operate our systems. Many electricity engineers who have graduated have moved into computing and software.’

The fourth element in mega trends is customer engagement, in which the utility customer must work with the company in making smart consumption choices.

‘For the energy system to survive in the future, it is critical that the customer be part of this process. Historically utilities have been very paternalistic. This is a two-way street,’ Mr. Gabriel said.

‘In parts of the world, customers are willing ot not use electricity at certain times of the day in exchange for a lower rate. There is a whole series of things around time of use pricing.’

He said in Grand Cayman, for example, the peak electricity usage was between 5pm and 8pm each day, and a system of variable rates would work here, in which customers can choose to not using washing machines, for instance, between those hours.

The fifth and last mega trend is business model evolution, which Mr. Gabriel said could be seen clearly in the Caribbean.

‘In the old days, an monopoly owned the utility, usually connected to the government, and it made all the decisions for you. Today there is a variety of financial arrangements going on, an array of business opportunities,’ he said.

Mr. Gabriel said this was already beginning in Cayman with CUC seeking proposals from other companies or individuals for alternative energy.

He said that understanding those mega trends and recognising how to work with them, and take advantage of business opportunities they offer, was vital for utility companies.

‘The bottom line is carbon is an issue, there is a business opportunity around it, an opportunity both to do well and to do good.

‘For example, if you can cut back on carbon footprint by incentivising energy efficiency, there is a marketing opportunity here. This requires some regulatory understanding, it’s a non-traditional way of looking at the world because historically utility companies have been compensated by selling kilowatt hours, so how do you build a model for not selling kilowatt hours.’

‘If you can avoid producing carbon, there is a world financial market now set up to buy carbon credits,’ he added.

Mr. Gabriel was among an array of speakers at the conference. CARILEC was set up in 1989, and this year’s theme was ’20 years of harnessing the power of partnerships’.

Cayman’s Caribbean Utility Company hosted the CARILEC conference between 8-10 June.