My previous predictions talked about the rise of RenTechs, self-powering communities, and the role AI and robotics will play for utilities in the coming future. In the final installment of my 2018 predictions for the energy and utilities industry, read how Elon Musk will prove battery technologies’ potential for energy storage and how Utilities transformation programs will accelerate and start to pay off.
Prediction #4—Elon Musk will prove battery technologies’ potential for energy storage
Elon Musk is a very outspoken and strong advocate of battery technology. It is impossible to talk about battery technology and not say something about him. One example is how he responded to the recent power outage in South Australia, promising very publicly to get the system installed and working within a hundred days of contract signing or it would be free. The future will become tilted towards the use of batteries to store self-produced power and costs will continue decreasing, on track to be below $190/kWh by 2020.
2018 will be the year batteries prove themselves. Significant projects are underway worldwide in which battery technologies are being implemented at the utilities scale. South Australia, which faces power outages related to the variable nature of renewable energy there, has a high percentage of renewables and that can impact the grid adversely. Hence, the decision to install 100 MW of battery capacity to make the grid harder and take the excess energy when the renewables are strong and using the battery when renewables aren’t pushing enough energy.
The other area that’s interesting to watch is the storm-ravaged Caribbean, where Puerto Rico and some other islands need to rebuild their energy infrastructure. We are going to see a higher percentage of renewable energy going into that rebuild and we’re going to see battery technology. Once these projects start getting real, you start hitting the tipping point about proving technologies, and this is the year batteries will prove themselves.
Prediction #5—Utilities transformation programs will accelerate and start to pay off
2018 is also the year that utilities transformation programs will start to pay off. The deciding factor enabling these programs to accelerate is the role of the Chief Digital Officer (CDO), whose job it is to improve performance, take costs out, and transform their operations. Once a senior executive is perceived to take on that role, the board of directors is more likely to be aware of it, paving the way forward for a program and agenda to be built around it.
In addition to CDOs working to the benefit of their own organizations, peer-to-peer networks, and communities of like-minded CDOs are forming to understand and help one another with the programs. CDOs know that transformation is needed and when an organization invests a senior executive’s efforts, it will accelerate the transformation.
In a world rife with change, energy and utility companies can and must take advantage of the manifold opportunities presented to them by technological advancement. The full list of these opportunities is long, but, in my opinion, the rise of RenTechs, self-powering communities, the role of AI and robotics, battery technology and utilities transformation programs will emerge as most important in 2018 and help herald the dawn of a brighter, cleaner, and more prosperous tomorrow. I wish you the very best in 2018!
Updated: Watch the prediction video below.