Vision, systems thinking, and leadership in energy policy

As the election year marches on, policy experts have turned toward discussions about strategies that could potentially lead to vision, systems thinking, and leadership in energy systems.

In the last year, The Breakthrough Coalition, made up of two dozen elites including such tech luminaries as Bill Gates, have planned to pool investments for early stage clean energy technology companies, representing a shrewd move by savvy business people to help move us to a cleaner energy future. And yet, despite those efforts, U.S. energy policy remains a slow-moving beast.

Both houses of U.S. Congress did pass energy legislation this session, with momentum gaining, albeit slowly, towards the #COP21 Paris Agreement. At home, some states are already moving to implement the Clean Power Plan. While some would have liked it to go further, others haven’t moved towards compliance in hopes of a possible reversal of the rule by the U.S. Supreme Court (Note: the court has consistently granted EPA under the Clean Air Act to regulate air emissions from power plants, but some legal vulnerabilities may be found in how the CPP rules were written and how the law is enforced).

Other interesting signs from the Federal Government include U.S. Supreme Court cases (Hughes v. Talen) and (EPSA v. FERC), each of which affirmed the Federal Regulatory Commission’s (FERC) jurisdictional authority to regulate wholesale energy markets. Today, wholesale markets are allowing innovation such as demand response tools and energy storage products to slowly start to compete against legacy utility large base-load power plant generation options.

Still, there are reasons to ask whether states that allow energy retail competition may see more benefits in the future from distributed energy resources and a fostering of the entrepreneurial spirit. Electric utilities have historically spent only about 0.1 percent of total revenues on research and development (R&D), while biomedical, electronics, and semiconductor industries in the U.S. reinvest about 20 percent of revenues there. And yet some electric utilities today are - again only slowly - starting to allow some new technology innovation into their sphere. The question is whether the changes are big enough, fast enough, and bold enough to accelerate the change from the legacy high carbon economy to the clean energy economy.

At a panel presentation at the Nelson Institute Earth Day Conference on April 22, I asked “how disruptive does disruptive change in the energy system need to be…to save our planet?” Through social change, new energy technologies, and new energy business models, it’s certainly possible to achieve disruptive change. Yet for all the reasons cited above, incrementalist policy is the most likely step forward in the U.S.

UW-Madison's Role

UW-Madison

Members of UW–Madison’s Dynamic Distribution System (DDS) team are collaborating with U.S. Department of Commerce and the National Institute for Standards and Technology on its Transactive Energy (TE) challenge project. Our research recommends that reference architecture, such as the DDS, can serve as the vector point for ongoing thinking about the electric grid of the future, including new economic market models envisioned in TE. This work can provide the systems thinking necessary for disruptive change in the energy sector while supplementing policymakers’ decisions to provide vision and leadership necessary to move forward.