Mar 112010

Dennis Wraase, former CEO and Chairman of Pepco Holdings Inc. (and the first executive-in-residence at the Center), spoke last night on the future of the energy industry.  In his words, it was all about “energy conservation through the eyes of a major energy utility” — which, at first glance, sounds counterintuitive.

The goal is to encourage consumers to use less of the very product that Pepco sells, he said.  So how does this make sense?

Changing the way consumers think about and use energy will allow the entire industry to become more efficient, and will move us that much closer to the 80 percent reduction in CO2 emissions (from1990 levels) by 2050 that the industry believes is within reach.

So, without further ado, here is Wraase’s forecast for what that future will look like (and what it will take to get us there):

  1. Leadership–Strong leadership, and consistent policy, at all levels (federal, state and local) is essential.  Right now energy policy changes at the whim of every politician.  Wraase said the industry ‘jumped for joy’ when President Obama brought up the possibility of decoupling, only to have that excitement evaporate when it was made clear that approvals had to be made at the state level.
  2. Collaboration & Innovation–The industry and the government must work together to fund the research and development of new efficient technologies, and new regulatory models.
  3. New role for customers–Customers have to take the lead in better managing energy usage, and this is absolutely key, Wraase said.  But this is a function of better information.  It’s been shown that customers reduce energy usage by as much as 25 percent when they are aware of the rate differences.  Wraase also said that better customer service is a huge part of this–being able to get on the phone with a customer, have him or her turn off an old AC unit in real time and pinpoint the exact energy savings.
  4. New products–Smart appliances, equipped with smart chips that receive price signals and can indicate the best time to defrost a freezer for example, eliminate the need for customers to even be aware of the pricing and usage to some degree.
  5. Electric vehicles–Look no further than yesterday’s Wall Street Journal for news of a 100 mpg electric vehicle that may slay the Prius.  With 5-6 new EV models due out next year from manufacturers like Nissan and more, the idea of 800 million electric vehicles being on the road in 40 years (or 40 percent of total vehicles) doesn’t seem so far off.

The fully digitized system Wraase predicts, in which your car (operating as a mini generator) and entire home is outfitted with smart chips that communicate with each other via your electrical lines, raises some complex security/privacy issues, but nonetheless is an interesting future to contemplate.

So, can you change the world one lightbulb at a time? Wraase certainly thinks so.

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