Utilitiesand Energy Management

Utilities and Energy ManagementUtilities and Energy Management

We’re Members of a Larger System – The Global Community

Technology, Energy Markets and Competition Affect Us

Why Do We Need To Change???

Source: Ray KurzweilSource: Ray Kurzweil

Rate of Technical ProgressRate of Technical Progress

The overall rate of technical progress is currently doubling (approximately) every decade; and the rate of that acceleration is itself growing exponentially.

So, the technological progress in the twenty-first century will be equivalent to what would have occurred over the previous 200 centuries!

Sources: Pritchett and Associates and Shift MaSources: Pritchett and Associates and Shift Magazinegazine

MegaTrends - TechnologyMegaTrends - Technology

80% of the world’s technological advances have 80% of the world’s technological advances have occurred since 1900occurred since 1900

More information was produced between 1965 and More information was produced between 1965 and 1995 than in the entire 5,000-year period from 3000 1995 than in the entire 5,000-year period from 3000 B.C. to 1965.B.C. to 1965.

20 years ago there were 50,000 computers; that 20 years ago there were 50,000 computers; that number is now being installed daily.number is now being installed daily.

The average person in the West interacts with The average person in the West interacts with microchips about 300 times per day.microchips about 300 times per day.

Source: Deloitte Touche Global Technology PraSource: Deloitte Touche Global Technology Practicectice

Mega Trends - TechnologyMega Trends - Technology

Web browsers expand in variety and functionality, Web browsers expand in variety and functionality, driving communications between customers and driving communications between customers and suppliers.suppliers.

Fuel cells to grow in abundance, beginning first with Fuel cells to grow in abundance, beginning first with applications in industrial equipment and recreational applications in industrial equipment and recreational vehicles, and proceeding to propel passenger vehicles, and proceeding to propel passenger vehicles around 2010.vehicles around 2010.

Quantum computing becomes a reality, allowing for Quantum computing becomes a reality, allowing for workstations with the power of a Cray workstations with the power of a Cray supercomputer.supercomputer.

MegaTrends – Digital and MegaTrends – Digital and Communications OverloadCommunications Overload

100 million cell phones in North 100 million cell phones in North AmericaAmerica

46,000 people sign up each day for cell 46,000 people sign up each day for cell phone servicephone service

10 billion email messages are 10 billion email messages are exchanged each day (expected to grow exchanged each day (expected to grow to 35 billion in 3 – 5 years)to 35 billion in 3 – 5 years)

Time on web rivals time in front of Time on web rivals time in front of televisiontelevision

Research shows:Research shows:

59% check office voice mail after work hours59% check office voice mail after work hours 30% accept work faxes at home30% accept work faxes at home 29% can’t leave home without cell phones 29% can’t leave home without cell phones

39% will answer cell phone in bathroom39% will answer cell phone in bathroom

MegaTrends – World of WorkMegaTrends – World of Work

85% of all U.S. organizations now outsource 85% of all U.S. organizations now outsource services once performed in-houseservices once performed in-house

Over 45% of American companies have reduced Over 45% of American companies have reduced their workforces every year since 1990their workforces every year since 1990

More AmericansMore Americans Make computers than all forms of transportMake computers than all forms of transport Work in accounting firms than in the whole energy industryWork in accounting firms than in the whole energy industry Work in biotechnology than machine toolsWork in biotechnology than machine tools Work in the movie industry than the automotive industryWork in the movie industry than the automotive industry

Futurist Peter CochraneFuturist Peter Cochrane

MegaTrends – Use of TimeMegaTrends – Use of Time

A generation ago the average person had a A generation ago the average person had a 100,000-hour working life100,000-hour working life

Today, we can do everything that person did in Today, we can do everything that person did in 10,000 hours.10,000 hours.

In the next generation, people will be able to do it in In the next generation, people will be able to do it in 1,000 hours.1,000 hours.

The 21The 21stst Century Worker Century Worker

Alvin Toffler, Futurist & Author:Alvin Toffler, Futurist & Author:

““The illiterate of the 21The illiterate of the 21stst Century will not be those who Century will not be those who cannot read or write, but those who cannot cannot read or write, but those who cannot learn, learn, unlearn and relearnunlearn and relearn.”.”

Source: Bureau of Labor StatisticsSource: Bureau of Labor Statistics

Labor Force Growth Rates by RaceLabor Force Growth Rates by Race2002 - 20122002 - 2012

51

33

19

912

Asian Hispanic Black White Total

Meet Your Global VillageMeet Your Global VillageThe breakdown of a hypothetical “global” village of 100 personsThe breakdown of a hypothetical “global” village of 100 persons

57 Asians 57 Asians 21 Europeans; 14 from the Western Hemisphere, both north and south 21 Europeans; 14 from the Western Hemisphere, both north and south 8 Africans 8 Africans 52 would be female 52 would be female 48 would be male 48 would be male 70 would be non-white 70 would be non-white 30 would be white 30 would be white 70 would be non-Christian 70 would be non-Christian 30 would be Christian 30 would be Christian 89 would be heterosexual 89 would be heterosexual 11 would be homosexual 11 would be homosexual 6 people from US would possess 59% of the entire world's wealth 6 people from US would possess 59% of the entire world's wealth 80 would live in substandard housing 80 would live in substandard housing 70 would be unable to read 70 would be unable to read 50 would suffer from malnutrition 50 would suffer from malnutrition 1 would be near death; 1 would be near birth 1 would be near death; 1 would be near birth 1 ( yes, only 1 ) would have a college education 1 ( yes, only 1 ) would have a college education 1 would own a computer 1 would own a computer

Source: Exxon MobilSource: Exxon Mobil

Energy Consumption ProjectionsEnergy Consumption Projections

Coal TrendsCoal Trends

Higher natural gas and oil prices, and above average temperatures boosting coal consumption and prices

Source: Dr. Dale Pfeiffer, "Eating Fossil Fuels"Source: Dr. Dale Pfeiffer, "Eating Fossil Fuels"

Technology Depends on Fossil Technology Depends on Fossil FuelsFuels

Constructing…….Constructing…….

an average car consumes the energy equivalent of an average car consumes the energy equivalent of approximately 27 barrels of oil.approximately 27 barrels of oil.

32MB DRAM chip requires 3.5 lbs of fossil fuels in 32MB DRAM chip requires 3.5 lbs of fossil fuels in addition to 70.5 lbs of water.addition to 70.5 lbs of water.

An average desktop computer consumes ten times An average desktop computer consumes ten times it weight in fossil fuels.it weight in fossil fuels.

Consolidation of Water UtilitiesConsolidation of Water Utilities

Water is the most fragmented industry in the U.S. Water is the most fragmented industry in the U.S. utility sectorutility sector

50,000 water utilities, with only 1% serving more 50,000 water utilities, with only 1% serving more than 100,000 customersthan 100,000 customers

Less than 15% are privately heldLess than 15% are privately held Industry very inefficient - and ripe for consolidation Industry very inefficient - and ripe for consolidation

for the following reasons:for the following reasons: More stringent drinking water standards from EPAMore stringent drinking water standards from EPA Reliability standards by state public service commissionsReliability standards by state public service commissions Seller’s need for cashSeller’s need for cash

AWWA Research FoundationAWWA Research Foundation

MegaTrends – UtilitiesMegaTrends – UtilitiesIncreasing Demands and Limited ResourcesIncreasing Demands and Limited Resources

California, Florida, and Hawaii have begun to California, Florida, and Hawaii have begun to address water scarcity through recycling.address water scarcity through recycling.

In California, municipal wastewater recycling is In California, municipal wastewater recycling is expected to reach one million acre-feet by the year expected to reach one million acre-feet by the year 2010.2010.

Reclaimed water accounts for approximately 40 Reclaimed water accounts for approximately 40 percent of Florida’s total water flowpercent of Florida’s total water flow


MegaTrends – UtilitiesMegaTrends – UtilitiesMore Stringent RegulationsMore Stringent Regulations

Surface and drinking water quality have dramatically Surface and drinking water quality have dramatically improved over the last 30 years.improved over the last 30 years.

Future challenges…….polluted runoff, landscape Future challenges…….polluted runoff, landscape modification, changes to water flow, airborne modification, changes to water flow, airborne pollutants, and aging infrastructure. pollutants, and aging infrastructure.

As water reclamation and reuse increases to As water reclamation and reuse increases to address scarcity, effluent limits are expected to address scarcity, effluent limits are expected to tighten in response.tighten in response.

The sale of bottled water reached $9 billion in 2003, The sale of bottled water reached $9 billion in 2003, or # 2 in revenues in beverage industry.or # 2 in revenues in beverage industry.


MegaTrends – UtilitiesMegaTrends – UtilitiesPending Financial CrisisPending Financial Crisis

The estimated investment costs for water and The estimated investment costs for water and wastewater over the next 20 years range from $500 wastewater over the next 20 years range from $500 to $800 billion.to $800 billion.

The average public water utility currently has a The average public water utility currently has a competitive gap of 19 percent.competitive gap of 19 percent.

In other words, the private sector has the potential In other words, the private sector has the potential to operate, maintain, and administer a public utility to operate, maintain, and administer a public utility

at 19 percent less cost than the current operator.at 19 percent less cost than the current operator.

Clean Energy – Five Key Clean Energy – Five Key TrendsTrends

General Electric Commits to Clean General Electric Commits to Clean EnergyEnergy

Source: Wall Street JournalSource: Wall Street Journal

General Electric’s CommitmentGeneral Electric’s CommitmentThe ParticularsThe Particulars

May 9, 2005 Jeff Immelt, CEO of GE, announces May 9, 2005 Jeff Immelt, CEO of GE, announces that the firm is hitching its future to the growth of that the firm is hitching its future to the growth of clean energy.clean energy.

GE has named its commitment “ecomagination.”GE has named its commitment “ecomagination.” Plans to double its R&D in clean energy to $1.5B in Plans to double its R&D in clean energy to $1.5B in

2010.2010. Projects $20B in clean tech revenues by 2010.Projects $20B in clean tech revenues by 2010.

Source: Clean Edge. Inc. Copyrighted 2003Source: Clean Edge. Inc. Copyrighted 2003

Migration Toward Clean Migration Toward Clean TechnologyTechnology

What is Clean Technology?What is Clean Technology?

Products, Services and Processes that:Products, Services and Processes that:

Harness renewable materials and energy sources Harness renewable materials and energy sources Dramatically reduce the use of natural resources Dramatically reduce the use of natural resources While reducing or eliminating emissions and wastesWhile reducing or eliminating emissions and wastes

These include such technologies as fuel cells, These include such technologies as fuel cells, hybrid electric vehicles, green chemistry, and hybrid electric vehicles, green chemistry, and solar/wind power.solar/wind power.

Source: Clean Edge Copyrighted 2003Source: Clean Edge Copyrighted 2003

MegaTrends – Clean EnergyMegaTrends – Clean Energy

Source: Clean Edge, Inc. Copyrighted 2005Source: Clean Edge, Inc. Copyrighted 2005

Clean Energy Trend # 1Clean Energy Trend # 1

Fuels from biomass grow like a weedFuels from biomass grow like a weed

Bio-diesel sales quadruple in 05 to 125 million Bio-diesel sales quadruple in 05 to 125 million gallons.gallons.

Near price parity with conventional diesel.Near price parity with conventional diesel. Senate passed bill requiring an 8 billion gallon Senate passed bill requiring an 8 billion gallon

renewable fuels standard by 2012.renewable fuels standard by 2012.



Energy efficiency becomes big businessEnergy efficiency becomes big business

18 states currently spend $1B annually on 18 states currently spend $1B annually on efficiency R & D programs.efficiency R & D programs.

General Electric’s Global Research awarded General Electric’s Global Research awarded federal contract to improve industrial motor federal contract to improve industrial motor efficiencies.efficiencies.



Concentrating solar power heats upConcentrating solar power heats up

Coalition of western states planning to install 1,000 Coalition of western states planning to install 1,000 MW of concentrating solar power (CSP)MW of concentrating solar power (CSP)

DOE’s goal is to cut cost of power generation via DOE’s goal is to cut cost of power generation via solar to $.07KW/hsolar to $.07KW/h

Sandia National Labs, the University of Nevada, and Sandia National Labs, the University of Nevada, and General Atomics researching the use of CSP to General Atomics researching the use of CSP to produce hydrogen for fuel cells.produce hydrogen for fuel cells.



Hydrogen infrastructure begins to emergeHydrogen infrastructure begins to emerge

California’s highway hydrogen initiative slated to yield 150 to 200 fueling stations by 2010.

Mitsubishi recently launched a Vancouver-based spin-off to make hydrogen fuel-production systems.

Toyota’s new president, Katsuaki Watanabe, plans to make development of fuel-efficient and environmental friendly vehicles one of his top priorities (Wall Street Journal/6/28/05)



Green building constructs a solid foundation 80% surveyed by Turner Construction said lower

energy and operations outlays recoup any additional costs of green building.

170 commercial buildings certified as “green” since 98 and 1,700 have applied.

About 24% of the new homes certified as green have been built just since 04

Huge focus for future since buildings consume 39% of energy used in U.S.

How Will These Trends and How Will These Trends and Changes Impact Us?Changes Impact Us?

Business will need to be as unusualBusiness will need to be as unusual If it’s not broken; then let’s improve itIf it’s not broken; then let’s improve it Unlearn, learn and relearnUnlearn, learn and relearn Be resilient and quick to adaptBe resilient and quick to adapt Continue to operate as a high reliability organization Continue to operate as a high reliability organization

to add predictability and stability to an uncertain to add predictability and stability to an uncertain environmentenvironment

Other impacts??Other impacts??