Strategic Planning is Dead?

Strategic Planning is Dead?

The road to hell is paved, not only with good intentions, but also bad choices.  Choices have consequences which require further choices.  Getting it right once is easier than getting it right consistently and continuously, especially when the definition of “right” is shaped by changing circumstances.  That's why so many businesses fail and so few survive over the long term.  It’s not that the ones that failed didn’t plan.  It is one thing to make a plan.  It is another to execute the plan.  When the planning and operational execution processes are decoupled, as they often are, eventual failure is almost assured.  It is one thing to plan incremental product line changes and cost saving measures.  It is another to anticipate and effectively prepare for longer term market shifts and competitive threats…especially when the related investments pay out over decades rather than years…. 

Kyiv Reflections, and a Nuclear Power Perspective

Kyiv Reflections, and a Nuclear Power Perspective

I’ve long treasured invitations to visit other countries.  Getting out of the US about once a year is a gift of perspective that keeps giving over time.  Inevitably, an overseas trip provides a reminder that all countries and communities face myriad technical, economic and political questions. Applying the chosen answers in each case is informed by individual histories and cultures. 

In the US, our institutions have evolved over decades and centuries; if we are honest about it, not always predictably or with due respect for all affected parties.  The same is true in other countries, but their critical junctures and directions of subsequent drift were different and are differently felt. 

All Clean Energy is Local

All Clean Energy is Local

Technology tells you what you can do; economics…what you should do; politics...what you will do.  Approximate oracles surely, but what are they telling us about our energy future these days?

In general, technology is telling us we have a proliferating number of new and excellent tools with which to change our energy infrastructure for the better.  Listening more closely, it is telling us that innovation has never been easier, but to stop looking for breakthroughs.  Energy breakthroughs these days are manifested by tipping points, not the brilliance of Nobel laureates. The apparent "aha!", on closer examination, usually turns out to be the product of twenty years of tenacity and scraping for funding, followed by a stroke of luck in the nick of time to head off a technology venture's imminent collapse.

A Different Drummer

A Different Drummer

"Why should we be in such desperate haste to succeed, and in such desperate enterprises? If a man does not keep pace with his companions, perhaps it is because he hears a different drummer. Let him step to the music he hears, however measured, or far away."

Most will recognize the author as Henry David Thoreau. I find the quote particularly poignant as I embark on The IRES Network adventure. For many reasons, including the brilliant work of my companions, I am no longer keeping pace with them in renewable energy. For nearly forty years we've marched to a unifying beat. It is now loud and clear. The work of pursuing a vision is done. The work of fully realizing the vision is well underway.

What's in the Name IRESN?

What's in the Name IRESN?

Integrated planning and operation of energy systems is not a new idea.  Ironically, it was more easily and (arguably) better accomplished in the past than in the present.  For example, electric utilities invested to create an economically balanced mix of generation resources.  The individual economic attributes of these resources were complementary.  High capital cost, low fuel cost base load plants (e.g. coal and nuclear) provided the majority of the energy.  They were complemented by plants that cost less per unit of capacity and consumed higher cost fuel (e.g. combined and simple cycle plant burning natural gas).  Plants and transmission links were located to give the franchise area grid a highly reliable carrying capacity.  All proposed generation and transmission projects were selected according to a goal of minimizing overall cost of delivered energy.

What is Renewable Energy Integration?

What is Renewable Energy Integration?

When we use the term “renewable integration” to describe IRESN’s focus, what do we mean? Integration with what?  In what context?  

IRESN has been active in certain major dimensions of renewable integration.  They are:

  • Project integration
  • Infrastructure integration
  • Money integration
  • Societal integration

Without some examples, these terms don’t help much either.  So, for example

Safe Driving in Data Blizzards

Safe Driving in Data Blizzards

Not knowing whether to change direction has consequences.  Disruptions and trends in the world these days will determine how our energy systems need to adapt or transform…changes in technology, relative costs, and the competitive need at all scales of energy use to respond both opportunistically and strategically.

Imagine driving at 90 miles per hour in a blinding snowstorm.  Obviously unsafe.  No one would do it even if there were no other cars on the road.  But our permanent energy data blizzard does tend to obscure the road ahead, and our current circumstances don’t allow us the option to slow down.

Energy Sector Decarbonization: Acceleration Requires Trust and Collaboration

Energy Sector Decarbonization: Acceleration Requires Trust and Collaboration

A recent gathering in Long Beach, California featured a lively debate between a Community Choice CEO. Geof Syphers, and the President of the California Public Utilities Commission, Michael Picker.  The debate will likely continue in other forums and ways.  Foundational assumptions are not yet in alignment.  They will need to be if both sides of the debate are to collaborate fully and effectively.

Will California’s energy future continue to depend primarily on state policies and initiatives?  Or is the state’s Community Choice movement ushering in a scenario where local initiatives become a major driver and policy enabler?  Or is the answer “both, and”?  

On Driving Down a Road with No Headlights

On Driving Down a Road with No Headlights

I once owned an old pickup truck.  It had loose steering, brakes that didn’t like long downhill runs and headlights that would stay on for about 20 miles and then take a break.  I could never find the source of that problem.  But I loved the truck.  I used it mainly for commuting to my job in Washington, DC from my home in the Virginia suburbs.  Sometimes on weekends I would use it to haul stuff out to a rustic cabin across a couple blue ridges in West Virginia. 

Smart Cities and Community Choice Energy

Smart Cities and Community Choice Energy

IRESN Comments to the California Public Utilities Commission Hearing on  Community Choice Aggregation Issues, February 1, 2017

The on-going rapid expansion of Community Choice Energy (Community Choice) in California is a breakthrough opportunity for successful deployment of economic, efficient and environmentally responsible local energy resources into competitive energy markets.

Shopping Local for Energy

Shopping Local for Energy

Does common sense apply to energy?  Would it be a plus for a community’s economy to shop local for energy?

Let’s take a look at the big picture.  Dollars are shipped out of town for each unit of energy that comes in.  They flow to regional utilities, wholesale fuel suppliers, then all the way down their supply chains, no part of which is typically local.  The outflow is economically significant.  When spread over the US population, annual energy costs were $3,461 per person[2].  This is about 10% of the per capita annual income in the little town in the Sierras mentioned above.[3]

Are Renewable Energy Subsidies an Unprecedented Budget Buster?

Are Renewable Energy Subsidies an Unprecedented Budget Buster?

Subsidies from government to new technologies or industries date back hundreds of years in the U. S. The purpose of subsidies is generally to give exciting new technologies a boost in helping fund the cost of starting up until its’ cost of production is competitive with older, less desirable methods. Subsidies keep prices for consumers below market levels or for producers above market levels, or reduce costs for consumers and producers. Subsidies have also been introduced to increase production of a product whose national need has increased due to war or other national calamity.

Intermittency — Marketing Term or Misunderstanding?

When I arrived back in California in 2007, a study was underway to determine whether renewable electricity could feasibly contribute 33% of California’s electricity supply portfolio by 2020.  The study had been commissioned in the wake of California’s first renewable portfolio law, which called for 20% of the state’s electricity to be “renewable” by 2010.  At the time, according to a definition of “renewable” that excluded the state’s fleet of large hydro-electric power plants, renewable electricity accounted for less than 10% of California’s annual electricity usage.  The law was enacted in 2002.

The “Intermittency Analysis Project”, under the leadership of Dora Yen-Nakafugi at the California Energy Commission, had taken a lot of effort and time, due to the complexity of project scoping and modeling necessary for a credible result.  Meantime, there had been adjustments in the portfolio standard, in part to lower the bar as to timing, in part to raise it as to percentage.  An executive order by California’s governor had added an aspirational standard of 33% by 2020, which eventually became the legal and regulatory standard for to the state’s investor owned utilities.  So, part of the project’s challenge also had to do with a moving legislative and regulatory target.

The study concluded that the 33% standard could be met without major changes in the state’s bulk electricity delivery infrastructure, aka the “transmission grid”.[1]

So, state agencies having jurisdiction over grid operation began to consider how their work and responsibilities would be affected if the standard were implemented.  In the humorous but all too true “Six Phases of a Project”, the third phase is listed as either “panic” or “total confusion”.  Something like this ensued.  At the beginning, data was crunched and published emphasizing randomness in the variability of wind power production at a specific site in California.  The point seemed to be that some increased level of electricity generation “intermittency” might be feasible, but it would have profound and scary implications for grid operators.

The point of this blog topic is not to analyze intermittency scariness.  There are several important and technically sound responses that focus on managing the issue rather than fretting over it.  A body of detailed and independent analysis addressing the concern has blossomed and has pointed to important mitigating factors.

One technical point that continues to be overlooked in all of this is that electricity grids have always been designed and operated to accommodate an inevitably high degree of variability in both localized and regional demand.  In other words, the state’s grid already handles significant “intermittency” in one fundamental dimension quite satisfactorily.  The proper strategy going forward is to deal with overall supply and demand “variability”.  For example, it will be quite feasible to expand the use of demand response measures, time of use pricing and smart grid information.  These measures can significantly increase predictability and reduce variability in aggregate demand, thus opening a wider window for variability on the supply side.

What I overlooked for a long time was the use of “intermittency” as a political marketing term to discourage policies supportive of renewable energy deployment.  The intended message to the public was, “You don’t want your power to be intermittent, do you?” to hark back to an earlier blog, Words Do Matter.  At a minimum, people and organizations favorably disposed toward renewable energy should avoid the terms “intermittent renewables” and “intermittency”.  They imply a problem for which there is no solution.  This is far from the truth.

Yes, it is true that solar and wind resources are variable.   Typical levels of variability, and even the occasional “perfect storm” of coincident and compounding supply and demand ramps, are quite manageable in thoughtfully designed market structures using modern information resources.  The proper immediate course is to make full use of new solar and wind forecasting tools that enable grid operators to plan for the inevitable and daily variations.  (Our compliments to Jim Blatchford at CAISO for leadership in this direction.)

In the US and California, long term electricity supply planning is increasingly neglected under a questionable assumption that market outcomes are unpredictable, and current market structures can continue to serve us well in the long term.  This is a mistake.  Cost effective strategies will be available to accommodate ever increasing renewable electricity percentages.  But these strategies won’t be deployed in 20th century business as usual market structures.  They should be the focus of increased attention to long term electricity system planning.  Each strategy needs its own discussion.  Future blogs will take them on one by one.

For now, let renewable energy advocates agree to stop validating the marketing messages of renewable energy opponents.

– Gerry Braun

© 2012 The IRES Network