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US energy expert urges South African policymakers to cater for ‘disruptive’ technologies

NREL CEO Dr Dan Arvizu

NREL CEO Dr Dan Arvizu

15th October 2015

By: Terence Creamer

Creamer Media Editor

  

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The head of US Department of Energy's National Renewable Energy Laboratory (NREL) has cautioned South African policymakers to cater for the emergence of “disruptive” energy technologies while still making the short-term decisions required to improve the reliability of the electricity supply industry.

Speaking to Engineering News Online during his visit to South Africa, Dr Dan Arvizu, who has served as NREL director and CEO since January 2005, said various technologies were advancing apace, adding complexity to policymaking and planning processes.

It was, thus, increasingly important to ensure that policy choices did not “lock-in” solutions that would make it difficult to adopt potentially “game changing” technologies, such as energy storage.

South Africa was currently considering the construction of 9 600 MW of new nuclear capacity, which would have a long construction lead time, as well as a multi-decade generation profile. Some critics believe the build programme could crowd-out more cost-effective alternatives, as well as the introduction of breakthrough energy technologies.

“What we at NREL have recognised is that technology will continue to improve and it will continue at a rate that will surprise you. So public policy needs to be fashioned in a way that leaves open the opportunity and the flexibility to employ new technologies as they arise.”

Arvizu highlighted the fact that US industry experts had “missed” the potential impact that shale-mining innovations would have on the energy system and that the country was now reversing earlier plans for the importation of liquefied natural gas in favour of exports.

While remaining “technology agnostic”, policymakers should cater for flexibility while focusing on their primary mandate of ensuring the platform was in place for the delivery of “reliable, safe, affordable, accessible and environmentally benign” electricity. Such a platform was less about the technologies themselves – all of which had strengths and weaknesses – than it was about ensuring that finance could be mobilised in support of the necessary investments.

Besides the likelihood that disruptive technologies would emerge, Arvizu also outlined three other components of his ‘4D Mega Trends’ hypothesis during meetings with Eskom, the National Energy Regulator of South Africa, government departments, including the National Treasury, the Independent Power Producer Office and academics.

Another key future trend was likely to be the emergence of ‘differentiated’ energy services. “I believe the focus will shift from selling electrons to selling energy services,” Arvizu mused, arguing that the energy sector could quite possibly mimic the innovation-rich evolution that had taken hold in the telecommunications sector since deregulation.

He also forecast a ‘disintermediation’ of the supply-chain, which would place major pressure on the vertically integrated utility model, with new “Uber-like” participants entering different parts of the energy value chain.

His fourth and final mega-trend proposition was that ‘distributed generation’ would expand strongly, resulting in a fundamentally changed relationship between energy suppliers and consumers.

All four trends were being spurred by the growth and evolution of the digital economy, which was enabling greater visibility of the opportunities.

“But with all these new opportunities will come new challenges,” he warned, with a failure of the education system to keep pace with the changing demands of the economy generally and the energy sector more specifically held up as a key area of risk.

“The average worker will need to have a set of technical skills that we have never had before.”

Edited by Creamer Media Reporter

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