2 minute read
4Ds: The Changing Electricity Landscape
The electricity industry is undergoing consequential change driven by the evolving customer and societal expectations around decarbonization, decentralization, digitalization and democratization . • Decarbonization is the most prevalent trend in the industry, given the urgency to act on climate change and the meteoric rise of clean energy investments .
• Decentralization is driving the adoption of microgrids and other distributed energy resources, especially in remote communities with limited access to provincial and territorial grids . • Digitalization is propelling tremendous improvements in communications technology to optimize system operations, using advanced technologies such as artificial intelligence, blockchain and robotics . These technologies have reduced costs and enabled greater efficiencies for both energy producers and consumers . • Democratization in some jurisdictions is enabling new players to enter the electricity market . These trends are having a transformative impact on the electricity industry . However, there is a lack of consideration for companies pivoting to address these emerging trends within the existing rateregulated systems . Although many electricity companies have started to build innovation-based capacities and business offerings through non-regulated subsidiaries, there is a public imperative to allow these innovations to occur within the rate-regulated systems as well . The failure to allow greater risk-taking and innovation by electricity companies to adapt to these changing conditions would be a hindrance not only to industry’s progress and modernization, but also detrimental to customers in terms of the rates they pay, how services are delivered, and the energy management options they have . The most significant issue within this 4Ds transformation is the evolving government and societal expectations around electrification of transformation .
This shift to electrification of transportation is accelerating worldwide, and the ability of the electricity sector to effectively meet this growing demand is pivotal to its long-term success . Many electricity companies in Canada are uniquely positioned to support the growth in electric transportation—not only through power production, but also through strategic investments in distribution and fast-charging infrastructure . This again requires greater regulatory innovation through provincial and territorial government directives, in some jurisdictions more than others, to create appropriate rate classes for different charging needs and allow companies to rate-base upfront infrastructure costs associated with deploying fast charges .
