ENERGY INNOVATION AND FUTURE OF LOCAL DISTRIBUTION COMPANIES
Student: Sara Aminaei
Course: LAW 6573 - Energy and infrastructure Innovation: Law and Policy (Summer 2017-2018)
Table of Contents TOC \o "1-3" \h \z \u Abstract PAGEREF _Toc520027613 \h 3Introduction PAGEREF _Toc520027614 \h 8The essence of innovation PAGEREF _Toc520027615 \h 8Recommended Actions for Innovation PAGEREF _Toc520027616 \h 10Policy formation for innovation PAGEREF _Toc520027617 \h 12Landscape in which the Canadian Electricity Utilities Operate PAGEREF _Toc520027618 \h 13The Emergence of big data PAGEREF _Toc520027619 \h 13In-House Research and Development Arms PAGEREF _Toc520027620 \h 15Collaboration Ecosystems PAGEREF _Toc520027621 \h 15The Concentric Model PAGEREF _Toc520027622 \h 17The Green Energy Act PAGEREF _Toc520027623 \h 18Capacity Markets White Paper PAGEREF _Toc520027624 \h 19Ontario Center of Excellence PAGEREF _Toc520027625 \h 19Priorities of Ontario’s Local and Distribution Companies in facilitating Research and Developments PAGEREF _Toc520027626 \h 21Project Development as a result of innovation done by the Local Distribution Companies PAGEREF _Toc520027627 \h 22Improvements on the operation of LDCs as a result of innovation PAGEREF _Toc520027628 \h 23The Plugin Electrical Vehicles PAGEREF _Toc520027629 \h 24Advantages of plug-in electric vehicles PAGEREF _Toc520027630 \h 25Need for Smart Cars communication with Smart Grids PAGEREF _Toc520027631 \h 25The impact of Electric Charging of Vehicles on Local Distribution Companies PAGEREF _Toc520027632 \h 26Electricity and Public Transportation PAGEREF _Toc520027633 \h 27Conclusion PAGEREF _Toc520027634 \h 27References PAGEREF _Toc520027635 \h 29
The role of energy innovation is diminishing in a generation of technology, financial, policy changes in the industry. These changes will find the future of local distribution company in Ontario (Canada). According to an institutional theory of organization innovation of technology can break through the cultural resistance to change and historically. The electricity distributors association discovered public campaign; this campaign promotes the role of electric energy and importance, and role of local distribution companies to transfer energy to consumers (EDA, 2015). Ontario is the largest electricity distributor in Canada that produces electric energy and transfer to millions of homes, and industries. Ontario takes high voltage power supply from wires and delivers low voltage power supply to homes, and industries. It is also accountable for billing users and implementing energy conversion program. Local distribution companies (LDCs) provide a contact between millions of users and rest of the system (EDA, 2015). There are many benefits of latest energy distributor technologies such as reduced transmission losses, more efficient, low distribution losses, low power consumption, new methods of electricity storage, use renewable sources to produce electricity
Local Distributor Companies provide around 65% of electricity to millions of homes in Canada. The Hartley Bay is the first micro grid in Canada which provides up to 2 GWh of electric energy per year at cost of $0.67 per kWh (Natural resources Canada, 2016). The Cayuga GRS is the largest solar farm in Canada that produces around 100 MWh energy and almost 17000 homes in Canada uses this electricity (The spectator, 2015).
There are many challenges faced by LDCs such as customers expecting more from utilities: more innovation, more flexible, more efficient, more reliability, and more value. Sustainability issues are also rising in the customers; users want socially and environmentally responsible options (Post carbon, 2015). The cost of energy distributors is also varying due to many factors. GDP increased by around 41% but electricity consumption increased by 19% between 1996 and 2007. According to 2013 data, the cost of energy has decreased while global adjustment has increased. Innovation is good for future because it is correlated with both financial and competitive. There are many benefits of innovation such as improving revenues, decreasing cost, increasing efficiency and reducing financial risk. The scope of this idea is limited to a thematic conversation of the many technologies, stakeholders, and trends at the LDC world.
These new technologies are changing the structure of our grid from a centralized, monopolistic, one-way system with large generators towards distributed generation (DG) and a two-way paradigm, supported by advanced communications infrastructure.
Modernization of the grid serves as one of the solutions of offering electricity solutions to individuals in the society. The changing events in the nation pushing for sustainability are some of the factors pushing for innovation. Achieving such targets calls for having the guiding drivers. One of the primary drivers is the elimination of greenhouse gases. Several strategies have been set to accomplish such objectives in the society. The aligning of the goals is one of the factors set that will influence such excellent levels of operation. The policy paper will guide in the aligning of the goals and the targets of the company through the innovation process. Despite the policies, there is still pressure being experienced for example as a result of the macroeconomic landscape. There was too pressure from collection, storage and proper usage of data. However, support from the various economic sectors have made it easy for the management of the data to be achieved. The innovators are also to be recognized through their innovation as a result of the proposals they did make to the utilities. High levels of collaborations were experienced at such levels that significantly heightened the research process. The gold standard models contained in the concentric model offered proper guidance through the collaborative systems. One of the products of collaboration was the start of sufficient energy storage. Information regarding all these activities was attained from diverse centers for example the Ontario Center of Excellence that guided through the process of implementation of the different roles. Most of the Local Distribution Companies have made use of the company in coming up with various projects related to innovation. The companies were to improve in their operation citing the recommended actions from the various centers. Need for such improvements will be as a result of the significant challenges that are to be handled.
Much of our existing distribution system requires refurbishment within the next decades; by incorporating these new technologies, Ontario's electricity system will transform from a centralized model to a mixed model with a smart, clean, localized, and reliable configuration for the 21st century. Ontario's LDCs will be at the forefront of this change.
Ontario's supply mix will increasingly incorporate renewable generation: solar photovoltaics (PV), wind, and biomass. These technologies will become cheaper and more efficient in the coming years, increasing their appeal to provide customers both clean energy and a profit opportunity. Advances in energy storage (ES) can support the intermittency and power quality issues inherent with weather dependent generation. Batteries, flywheels, and thermal storage will encourage increased reliability and allow for price arbitrage. Finally, the electric vehicle (EV) will affect both demand and supply.
Changing demand patterns and technology will alter the relationship between customers and LDCs. Increased reliance on electric devices means that consumers require greater reliability. New structures in the future will draw net-zero energy by way of amended building codes, PV generation, conservation and demand management (COM) programs, and ES solutions. The transition to the smart grid and the smart home will result in a more robust, reliable, automatic, yet more complex distribution network. It will consist of comprehensive control systems to increase efficiency and innovations is an important consideration for their future business.
LDCs also play a role in developing new technology in the supply, monitoring, metering and use of electricity. LDCs need to be an innovative in their business practices in order to add value to their services. Governments are encouraging LDCs to take the risk of innovation for their future business. The LDCs need to be part of innovation for several reasons:
1 OEB regime encourage LDCS to do saving through continuous improvement
2 Recover the prudent investments in smart grid development and CDM
3 To reach conservation targets as conditions of License
4 Influence the expertise of the private sector and pilot program
5 Government mandate for smart Grid
LDCs need to invest in asset renewal, while concurrently building the smart grid. They do so with uncertainty about when net-zero homes and micro-grids will become popular. Even their customer base might change: some will be more reliant on LDCs, while others will need distributors solely for backup supply or might even choose to disconnect altogether. Understanding how new technology will change customer demand must inform the investments we are making today.