IEEE Electrification Magazine - June 2017 - 86

VIEWPOINT

the Stone Age did not end for the
lack of stone, and the Oil Age will end
long before the world runs out of oil.
All of the preceding reasons promote
the implementation of a national
energy plan in various parts of the
world, including the industrialized
and the developing countries that
breaks the coal and oil dependency
and, therefore, promotes the reduction of carbon and greenhouse
gases. Renewables will continue to
increase market share, and these
clean energy industries will be critical for long-term global economic
development. At the same time, strategic federal support is necessary to
stimulate the innovation pipeline,
which will, in turn, bring down the
real, unsubsidized prices of clean
energy technologies.
It is apparent that the age of
renewables is just beginning. DG is
the wave of the future and the round
peg in the square holes of regulations.
There will be more significant cost
reductions in all phases of renewable
energy development and deployment.
Ultimately, many regions are likely to
see a high distribution of solar power
collection and use as they take advantage of urban landscapes and cover
built surfaces.
This shift in energy delivery is
only a threat to some utilities because of an antiquated rate regulatory structure that only accounts for
centrally managed fossil fuel energy
generation. Electric utilities must
shift their thinking to keep up with
changes in the industry and build
smaller and cleaner power plants
closer to population centers. These
smaller plants might cost the utilities more initially, but, by pulling
themselves out of the transmission
game, it should become less costly
for them to produce energy closer
to load centers. The supply of the
base energy load will require power
generation from the local utility
until there is sufficient energy
storage to buffer solar and wind
oscillations. The utilities must get

I E E E E l e c t r i f i cati o n M agaz ine / J UN E 2017

aggressive with providing energy
storage and buffers, either at people's homes by creating a network
of distributed storage or by providing centralized storage near population centers.
The world has entered an era of
global energy deflation in which customer participation can reduce energy peaks, transmission congestion,
air pollution, and proliferation of
largely fossil-based generating units
in populated regions of the world.
Human-caused climate change and
air pollution are two major globalscale problems that are mostly
attributed to the burning of fossil
fuels. Mitigation efforts for both
problems could be accomplished
largely with low-carbon and carbonfree energy alternatives like nuclear
power and renewables, as well as
energy efficiency improvements. As
we switch from the era of dinosaurs
to the era of mammals in the energy
world, some players will cling to the
old ways and perish; others will
diversify, focus on sustainability and
customer participation, keep their
options open, gather intelligence,
and thrive. A new era of energy generation, storage, and renewables is
upon us, having emerged as the next
significant political, social, and economic era in world energy history.
In this era, centralized utilities
should join hands with large industrial and smaller residential customers to swiftly carry out the DG
evolution, which features direct
access, zero stranded-cost recovery,
the renewable-based aggregation of
small consumers, and performancebased rates.
Rather than squandering their
energies on developing defensive
strategies to resist the surge of renewable energy integration in their
turfs, government officials and electric utility planners should pour
those energies into figuring out how
to adapt to the coming new world.
They should heed the lessons of the
1970s, when the electric utilities'

strategy of circling the wagons turned
out to be counterproductive. The government-orchestrated restructuring
that potentially welcomes renewable
energy opens the nation's electricity
markets to all players sooner rather
than later; the utilities will be better
off adapting to this change, as it
would create a much more competitive and efficient utility industry. Plus,
lowering electricity prices dramatically and strategically would greatly
enhance the global competitiveness
of U.S. industries, especially in
electricity-intensive industries such
as the manufacture of automobiles,
steel, semiconductors, chemicals,
paper, petroleum, rubber, textiles,
glass, and aluminum.
We should also seriously consider
vertically integrated municipal utilities in smart cities as a viable business case where distribution utilities
still operate and optimize the power
system, offer operating services to
DG operators, run storage facilities,
introduce transactive energy, offer
integrated energy services, and apply
the smart grid to establish a hub
where the distributed optimization
of energy supply will elevate the role
of utilities and transactive energy in
the modernized energy infrastructure. It is evident that the utility
industry must fashion a new regulatory compact and a new business
model that allows a substernal customer participation in the way energy is produced and delivered if it is to
survive in this increasingly competitive energy world.

Biographies
Ghazale Haddadian (ghaddadi@iit
.edu) is a faculty member of the
Stuart School of Business at the
Illinois Institute of Technology
in Chicago.
Mohammad Shahidehpour (ms@
iit.edu) is a faculty member of the
Armour College of Engineering at
the Illinois Institute of Technology
in Chicago.

Table of Contents for the Digital Edition of IEEE Electrification Magazine - June 2017