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April 22, 2015 | by Steve Lawrence

Energy Innovation

How efficiencies and renewables are changing the markets and your business

Electric power generation is in the midst of a dramatic upheaval that is scrapping existing business models and bringing cheap solar and wind power online in ways that can lower costs and boost efficiencies for your businesses.

Jonathan Wellinghoff, former chairman of the Federal Energy Regulatory Commission (FERC), now a partner with Stoel Rives LLP, said that dramatic improvements in lighting, energy efficient building design, and the increasing cost-effectiveness of wind and solar are changing the way businesses, homeowners and utilities are using and paying for electricity. “The United States tripled the production of renewable energy between 2003 and 2013,” he said. “We are now producing more electricity from clean gas than from coal.”

The former FERC chairman said that because our electric distribution infrastructure is old, poorly planned and increasingly failing in extreme weather, energy users are looking for ways to lessen their dependency on the grid. “Distributed generation is declining,” he said, and “solar and new usage patterns are shifting the traditional electric utility business models.” Homes and factories are cutting their energy bills with rooftop solar panels that produce enough excess electricity to feed back into the local utility grid. Utilities wind up paying these customers, instead of billing them, he said. And usage patterns are shifting. “I know of a Mid-Atlantic aluminum plant that now turns off its pots during its utility’s peak demand hours,” Wellinghoff said. “The plant saved $200 million on its electric bill in one week, and the utility was able to use its generating capacity more cost effectively.”

He urged all industrial users to re-examine their energy sources and use patterns for potential savings. And stay on top of new technologies: “Wind power is now cheaper than any other way to generate electricity,” he said. “The United States needs to be concentrating on improving our own efficiency and productivity.”

 

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