Archer Public Affairs Senior Director Richard S. Mroz recently spoke on future trends in the energy and utilities industries addressing corporate directors from across the globe at the National Association of Corporate Directors (NACD) Global Board Leaders’ Summit in Washington DC.

Speaking to the audience about the unprecedented change the energy and utility industries are undergoing, Richard discussed the issues driving that change, including the desire for lower emissions generation sources and policies mandating reductions of carbon emissions; technology that is changing the grid; and the desire for “resilience.”

Resulting from a desire for electrification of the economy, Richard went on to talk about how the energy and utility industries are moving away from a 100-year old system of central station generation with transmission and distribution, to more distributed energy resources such as two- way power flow, self-healing circuits, on-site islanded black start micro grids, electric consumer and commercial vehicles and trucks. 

Expanding on that more, Richard brought up the issues that still remain. Natural gas is still cheap and new technologies are costly. The cost of offshore wind is still an unknown, and the technology isn’t there for round-the-clock distributed energy resources and renewable energy on a large scale. He added that for reliability there is an increasing recognition that we will likely still need to keep a traditional infrastructure in place while any transition occurs.   

While the promise is there with distributed energy resources storage and micro grids, regulation still lags. Stating that almost every state has some “grid mod” docket or proceeding, Richard added that very few states have taken a comprehensive look at all these issues, and with all this technology, cybersecurity is a huge looming threat. 

Richard concluded by saying there is a need for boards of directors to consider risks such as changing business models. For renewables companies, they need to determine whether their financial framework continues to support deployment. With regulatory risk, a company should know whether they can recapture costs, and a company needs to keep in mind the cyber risk.