The ‘grand bargain’: Industry outlook discussed at St. Paul event

Will Kaul addresses audience at Power Pairings event

Great River Energy Vice President and Chief Transmission Officer Will Kaul shared insights on the environmental benefits of electrifying the economy at “Positively Electric: Embracing Clean Electricity to Power More of Our Economy,” an event hosted by Fresh Energy. Photograph courtesy of Fresh Energy.

Vice President and Chief Transmission Officer Will Kaul was featured at an event in St. Paul titled “Positively Electric: Embracing Clean Electricity to Power More of Our Economy.” He shared insights on the environmental benefits of electrifying the economy and what he sees for the future of the industry. He also talked about ways the industry has changed (and hasn’t) since he began his career.

“I’ve been in this industry for over 40 years and when I started, we were asking ‘Should we be burning so much coal? Can’t we do a better job of energy conservation? How about renewable energy? Are nukes safe? Will we ever break our addiction to oil?’” said Kaul.

With these key questions still being asked, he said there are times when it “feels a little like Groundhog Day.” But, he said, a look back over 40 years actually shows a picture of significant progress and persistent change.

“While we still are having the same conversation, we have tackled tailpipe emissions, smoke stack emissions, urban smog and acid rain. We have made big improvements in energy efficiency and in the adoption of renewable energy. Now the issue is carbon: How do we solve that?” he said.

Kaul said electric utilities now find themselves in a position to move beyond this, through a gradual decarbonization of the electric generation resource mix and by electrifying the economy, or using electricity in new ways. He calls it the “grand bargain” – choosing a cleaner, more diverse power supply while also increasing sales.

“Our industry needs to decarbonize and we need growth to decarbonize. Without growth, we don’t need new generation. If we don’t need new generation, it’s hard to justify adding new renewable energy to our resource portfolios,” he said. “Growth drives decarbonization.”

Kaul said the industry is going through a total transformation over 40 years, and that we are now in year 20.

“Those first 20 years were driven by deregulation of the wholesale side of the business and we now have competitive, liquid and efficient wholesale markets. While wholesale markets will continue to evolve, now there’s a real focus on the modernization of the distribution system,” he said. “I wish I was 20 years younger so I could see it through.”

Kaul said utilities should jump into what he calls a “primordial soup of possibilities.”

“We have all the right ingredients: exponential decline in the cost of renewable energy, storage, electric vehicles, LED lights and so on. We have the convergence of digital technologies. We have networks on top of networks — and networks are value generators. These ingredients all will help move us toward electrification, but it’s up to utilities to discover the value in order to earn a greater market share,” he said. “We have to improve our products and services to better serve our customers and to get new customers.”

The event, sponsored by Great River Energy, was hosted by environmental advocacy group Fresh Energy. The primary purpose was to discuss putting electricity from the wind, the sun and other local clean power sources into more of Minnesota’s economy, such as for water heating, space heating and transportation.

Michael Noble, executive director for Fresh Energy, described Kaul as visionary and said one of his biggest contributions was his vision for the CapX2020 grid expansion. To Nobles’s question about whether or not investment in transmission is a thing of the past with the focus now on distribution technology, Kaul said investments cannot go all one way or the other. He also said the economics of utility-scale wind and solar are “hard to beat” and will require new transmission infrastructure.

Kaul talked about grid modernization and smart grid technologies. He stressed that the bulk electric system has been sophisticated and smart for a long time and is already handling the dynamics of intermittent generation.

“Some days in the MISO market, 50 percent of the energy is wind. There are months where 40 percent of the energy is wind,” he said. “The distribution grid is getting smarter, too. It will happen – it is already happening.”