Maine has an opportunity to evolve its old monopoly electric grid into a new competitive smart grid made up of an interactive, bidirectional network of energy producers and consumers.
Instead of being just energy takers — at rates we cannot control — Maine ratepayers under this new grid paradigm will use their own energy assets of distributed generation, storage, efficient appliances, software controls and backup power, according to price signals enabled by real-time communication and data transfer. Maine ratepayers have already paid for the state’s utilities to install much of the necessary smart grid hardware to allow customers to participate in the energy marketplace, but allowing customers to use this infrastructure is critical to our energy future. When we open the grid to customer participation, we create a competitive marketplace, organizing new ideas and technologies that bring efficiency to a system that has become outdated, overbuilt and far too costly.
The decision to adopt a modern and open electric grid or keep it closed to true competition is being made right now, and it’s critically important that Maine’s leadership gets it right. Now is the time to adapt our grid into a platform that delivers value to ratepayers rather than allowing it to remain little more than a vehicle to deliver guaranteed returns to corporate utility shareholders. Locking in the old grid model resigns Maine to a last place position on energy independence and security.
Comprehensive grid modernization that encourages consumer-owned solar generation, as well as many other new distributed energy technologies, is an opportunity to unleash thousands of new jobs, reduce costs for ratepayers and keep our energy dollars in the local economy.
Richard Schmalensee, a professor at the Massachusetts Institute of Technology, used his position in academia to suggest that Maine can lead on solar by moving to utility scale projects. He argued recently in the BDN that economies of scale during construction are the key factor that should decide our energy future and that utility-owned solar will lower the cost of renewable energy.
With great respect to Schmalensee and the MIT Center for Energy and Environmental Policy Research, which is sponsored by a number of fossil fuel and utility giants, utility-scale solar will not make Maine a genuine leader on energy. A volume of research has found that construction cost is only a portion of the cost of a kilowatt-hour delivered to a customer. Solid research concludes that when transmission losses, transmission and distribution expenses, and other factors are added together, centralized solar is no longer the winner on cost. Distributed solar is as equally economical as utility-scale.
We should consider whether utility-scale construction would provide durable employment that attracts and retains the best and the brightest in our state and creates an employment base for the future as distributed solar does today or whether utility-scale projects, built by out-of-state transient workers, primarily benefit out-of-state shareholders with little or no interest in the Maine economy.
Schmalensee would like us to think it’s an either/or choice and that we can safely allow utilities and large corporations to own solar, preserving the need for an ever larger electric grid to deliver that power, but we’re under no obligation to follow his advice. Our legislators, regulators and the people of Maine are deeper thinkers who can see that the utility-centric point of view cuts out other stakeholders and eliminates access to brilliant smart grid innovations occurring nearby and globally.
We should set our sights higher. By understanding the full set of costs and values offered by new energy technologies, we can create a truly innovative energy future. Distributed solar contributes valuable services not possible with centralized generation, and those services will maximize total ratepayer benefit over the long run. It’s hard to imagine calling ourselves leaders by pushing solar and other new technologies backward into a century-old model of monopoly ownership rather than using the opportunity to create a truly competitive and open energy marketplace. All Mainers and the Maine Public Utilities Commission have more in mind, and we should support them.
William Behrens is one of three managing partners of ReVision Energy, a Maine-based firm with 150 employees in Maine and New Hampshire. He holds a Ph.D. from the MIT Sloan School of Management.