CIAO DATE: 11/2013
September 2013
The future of the U.S. electricity sector is hard to foresee – and it is never wise to overpay one’s fortune tellers – but there appear to be some key trends and technologies that may reshape future electricity markets and determine the innovativeness, resilience, security, and global competitiveness of the sector. Discussions of the sector’s past, present, and future formed the heart of the 2013 Aspen Institute Energy Policy Forum. This report summarizes and organizes some of the key insights from those discussions. Looking back over the past decade, it is striking how many of the developments in the energy sector were not predicted, including the U.S. shale gas boom, the massive price drop for solar photovoltaic (PV) modules, and the lack of a big build-out of coal-fired power plants in the United States. With due respect, therefore, for the limits of prediction, the U.S. electricity sector nevertheless seems likely to encounter a few powerful trends over the next 5-10 years. The sector is likely to see continued disintermediation, anemic or negative demand growth, and broader challenges to the traditional utility business model from distributed generation. Smart electricity networks and “big data” analytics are likely to create vastly enhanced capabilities and significant value for both utilities and end-use customers, while integrating the physical and digital networks in the United States may similarly produce tremendous savings and benefits. Physical environmental constraints such as water scarcity and land availability are likely to affect sector operations and generation choices. The policy and regulatory frameworks within which utilities operate are likely to start shifting to new approaches designed to further minimize electricity costs, maximize reliability, and minimize environmental damage.
Resource link: The Future of the U.S. Electricity Sector [PDF] - 406K