Advanced Energy Perspectives

This photo of the Hoover Dam intake towers was taken by Raquel Baranow in 2014. Water elevation on that day at noon: 1086.39 ft.

As the saying goes, in the West, the whiskey’s for drinking and the water’s for fighting. While much of the attention related to EPA’s Clean Power Plan is focused, appropriately, on the emissions and economic benefits of the new standards, a report just released by the CNA Corporation identified another benefit that may end up being worth more than all the other impacts combined: water.

This post is one in a series of feature stories on trends shaping advanced energy markets in the U.S. and around the world, drawn from Advanced Energy Now 2015 Market Report, which was prepared for AEE by Navigant Research. 

The energy storage market is in a process of transition. It is going from a large infrastructure market focused on pumped hydro and underground compressed air projects to an advanced energy technologies market, fueled by technological innovation, liberalized market structures, and supportive policies. While the global market still revolves around pumped storage, energy storage in the United States is all about new batteries and other technologies. This distinction accounts for recent market dynamics.

“We haven’t changed the way utilities do business in over a hundred years,” Lisa Frantzis explained in this week’s Energy Gang podcast, which focused on building a 21^st century electricity system. Lisa, senior vice president of strategy at AEE, gave an expert’s perspective on a trend that everyone can see coming. The way we produce and consume energy is changing, and “at such a fast clip that the regulation basically has to catch up,” she said.

On her work convening industry stakeholders in New York, Lisa said, “people know that this is a good market. People know that the current business models aren’t necessarily going to work moving forward as these more innovative technologies come into the marketplace.” On February 26, the New York Public Service Commission (PSC) issued its much anticipated order in Track One of the “Reforming the Energy Vision” (REV) proceeding – and set the ball rolling on the most comprehensive reworking of the utility marketplace now under way nationally.

While policy wonks wait with bated breath for release of EPA’s final Clean Power Plan, some of us in the advanced energy industry are just as eagerly awaiting EPA’s draft Federal Plan for compliance, which will be revealed at the same time. Why the excitement about a Federal Plan? Because the stakes are high: Not only will the Federal Plan serve as a model for states as they begin to consider compliance options for the final CPP, it will apply to any state that does not submit a plan that passes muster with EPA. Questions have been raised about whether EPA can incorporate advanced energy options like energy efficiency and demand response, renewable energy, and advanced grid technologies into a Federal Plan for compliance. Our answer: Yes, it can.

Earlier this year, we published the Advanced Energy Now 2015 Market Report. That report showed that the U.S. market for advanced energy products and services grew 14 percent in 2014, five times as fast as the U.S. economy overall. At just under $200 billion in revenue, advanced energy is now bigger than the U.S. airline industry, equal to the pharmaceutical industry, and nearly as large as consumer electronics. That is big news. Just as important is what’s driving the growth of the advanced energy market in this country.

Looking across the market and policy landscape, I see five drivers of market growth for advanced energy companies, now and into the future.

1. Reducing Carbon Emissions. EPA’s Clean Power Plan won’t be final until later this summer, but the draft rule is already shaping markets for energy investment. For reducing carbon emissions from the electric power sector, advanced energy is the answer. Energy efficiency and demand response. Low-emission natural gas generation. Zero-emission renewable energy. Advanced grid technologies and energy storage. As described in our Advanced Energy Technologies for Greenhouse Gas Reduction report, these are the measures states can use to meet EPA standards and modernize their electric power systems for the 21^st century. AEE member companies are ready to deliver their solutions on a large scale. That means revenue growth for the industry and economic growth for the states that put advanced energy to work.