Blackouts, State Regulation and Lack of R&D Investment
The recent news stories of the potential for blackouts across the country create a super exclamation point (!) for why we need regulatory reform. While many entrenched interests are trying to blame renewables – the real driver is insufficient innovation, resulting from outdated regulations, better suited to the 1920s than the 2020s, and minuscule R&D investment from electric utilities that do not compete in a free market.
The Department of Energy just issued a report, The Role of Innovation in the Electric Utility Sector, highlighting how the lack of innovation in the utility sector threatens our access to a low cost, reliable, clean energy grid. The Report pointed to a McKinsey & Company 2020 study Building an R&D Strategy for Modern Times, which calculated each industries’ R&D investment (see graph below). To put it in perspective, the paltry energy utility sector R&D investment, by far the lowest of all the major industries, is one-sixth the level of the construction and infrastructure industry –an industry not known for its innovation.:
We are amid a radical technology shift in the electric power sector– and the companies most responsible for implementing the transition must invest in innovation if the system is to be successful.
The DOE Report highlights that state regulatory reforms are needed to encourage adoption of new technologies to support evolution of the nation’s power systems.
Iowa Business for Clean Energy will keep up the drumbeat for state regulatory reform – as the stakes grow bigger every day.