BREAKING DOWN DIABLO CANYON
It speaks volumes on how energy efficiency and the deployment of renewables are not marginal tools – rather they must be fundamental , leading tools in any utility ’ s or regulator ’ s toolbox from this point forward .
The bottom line is that utilities are now expected to increase customer energy efficiency and deploy renewables before anything else .
This does not , however , mean a reduction in utility capital spending . To the contrary , a widely acknowledged fact is the desperate need to improve the U . S .’ s grid , a capital-intensive endeavour . While investor-owned utilities invest around $ 100 billion in capital investments per year , according to Edison Electric Institute , many estimate that we will continue to have shortfalls in grid investment . The American Society of Civil Engineers , for example , estimates that the investment gap to our electricity infrastructure will be $ 107 billion by 2020 .
Grid upgrades are paramount to enabling utilities to play a constructive role in driving energy efficiency of their customers , as well as the successful deployment of renewables – both distributed and utility-scale . Smart grids , demand response , distributed generation , and effective integration of intermittent renewables are all predicated on a modern , effective grid .
Furthermore , PG & E ’ s proposal provides a stark example of the opportunity utilities have to transform their financial incentives to a structure that ’ s more compatible with the increasing societal needs around carbon reduction and energy efficiency . The proposal recognizes that the utility ’ s role is much greater than simply serving as an energy vendor . After all , a vendor would not typically advocate for a reduction in consumption . Striving to meet its customers ’ energy needs is a greater mission than maximizing energy sales – and one that can align shareholder returns with societal needs .
The message to utilities , their customers and investors is clear : prioritize efficiency , prioritize renewables ( both distributed and utility-scale ). If PG & E can leverage both of these areas to enable the retirement of 18,000 GWh of annual electricity production while voluntarily surpassing its 50 % RPS mandate , then what can other utilities around the country do , and how can their customers and investors benefit ?
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