Unleashing the Future: Disruptive Innovations Powering the Energy Transition Introduction

Reimagining Electricity Production as Energy Transition Evolves 

The orthodox design of power generation facilities has changed little since Thomas Edison commissioned the Pearl Street Station in lower Manhattan in 1882. Coal or another fossil fuel enters the power station through the back door, combustion gases leave through a chimney, and an extension cord carrying electricity leaves the front door. The inflexible Edison model was replicated for a century and remained the backbone of the power generation industry. Today, utilities utilize various technologies to produce reliable, low-cost electricity for their consumers, principally with fossil fuels. There is little incentive to decarbonize the power industry in this model, except through regulatory action.

The power industry has viewed decarbonization for at least the past two decades as shifting from solid fuels to natural gas and adding more renewable resources, such as solar and wind, to the resource mix at the behest of regulators. During this period, however, the life-cycle cost of renewable generation has dropped dramatically, with the levelized cost of electricity (LCOE) of solar and onshore wind now less than gas-fired combined-cycle plants, according to the U.S. Energy Information Administration.  

Now the challenge for grid operators and resource planners is integrating these low- or no-carbon plants into regional electricity grid systems with the least disruption, given the intermittency of wind and solar caused by changing climate and weather patterns.  Many commercial and industrial corporations are now embracing private ownership to ensure electricity supply.  Further, moribund utilities have little incentive to decarbonize, given their massive investments in conventional electricity-producing technologies.

In the meantime, a grass-roots revolution in the power industry has occurred. The varied number and type of electricity supply systems continue to expand. The most significant growth will occur with smaller generators, solar panels, wind turbines, small hydro, and the like, usually at the local level. The proliferation of these distributed generation units has been encouraged by federal, state, and local government policies and tax incentives to develop systems that provide increased energy security, grid resiliency, and emissions reductions. The conventional investor-owned utility model is being replaced with dispersed, diversified small plant owners with direct access to the grid.

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