Diverse portfolio, smart technology critical components of reliability and resilience, CEOs say
WASHINGTON – Having sufficient resources is a critical aspect of grid reliability and resilience, but energy company CEOs participating in a panel Monday at the National Association of Regulatory Utility Commissioners (NARUC) Winter Policy Summit also cited many other components, including having a diverse portfolio, utilizing smart technology and building competitive markets.
“Energy security for us is more than just having enough power to fuel growth,” Kent Logsdon, principal deputy assistant secretary in the U.S. Department of State’s Bureau of Energy Resources, said in opening remarks. “Energy security is something that policy makers and private sector leaders such as all as you work for. It’s about developing strategies to secure diverse and affordable energy resources, build competitive markets that drive down costs and send the right market signals…”
Several of the panel participants emphasized the importance of having a diverse portfolio of generation resources and an all-of-the-above generation strategy, noting that each type of resource has different capabilities and weaknesses.
“What I would say again is from the NGSA standpoint, we’re all about competitive markets … and diversity of fuels is a good thing,” said Orlando Alvarez, president and CEO of BP Energy Company and chair of the Natural Gas Supply Association (NGSA).
Many of the participating CEOs also mentioned the use of technology, including data analytics, smart metering infrastructure and drones, to enhance resilience and reliability.
“Technology plays a substantial role in today’s environment, perhaps more so than ever, and we continue to see new applications of technology and the ability to enhance our operations and to enhance the experience for our customer,” Scott Prochazka, president and CEO of CenterPoint Energy, said.
This new technology is driving substantial changes in the energy industry and, along with its benefits, brings with it new challenges such as cybersecurity concerns, the panelists noted.
David Velasquez, president and CEO at Pepco Holdings, discussed how the energy industry is changing in a broader sense.
“I’ve been in this business probably for about almost 40 years, and I will tell you this truly is a time of transformation like I haven’t seen in probably my entire career,” Velasquez said. “It’s a time when a lot of rhetoric that we’ve been hearing over the last many years is actually becoming reality and, in some cases, not only is the rhetoric becoming reality, it’s actually leading reality.”
In addition to digital technologies, the panel participants cited renewables, changing markets and regulations as drivers of change.
Alvarez highlighted the possible role of natural gas alongside renewables.
“Gas is playing a big role in supporting renewables,” Alvarez said. “When you think about some people are saying renewables will be 14 percent of the energy mix in 2040. You need gas to play into that for the intermittency, and we’re there today — we’re doing that.”
Velasquez expressed confidence that the energy industry could deal with the coming changes.
“You know, when I was thinking about the panel’s focus on technology, reliability, resiliency, the one thing that occured to me is this is nothing new for our industry,” Velasquez said. “From the very start, our industry has dealt with technological change, whether it was the introduction by Edison of the incandescent light bulb and then as time went on, the construction of the large-scale grid and now we start to see the development of wind, solar and other renewables that are taking a larger and larger stage.”
