Switch to alternative energy faces hurdles

BOULDER — Meeting high consumer expectations while developing and deploying new infrastructure and technology will be the keys to success if smart grids and electric vehicles are going to be successful, according to participants of the Boulder County Business Report’s latest CEO Roundtable.

The meeting of top local executives and researchers in the energy industry on March 22 was dedicated to alternative transportation and smart grids.

The discussion focused on emerging technologies, keeping customers satisfied and solving the logistical and regulatory problems smart grids likely will create.

The promise is great, and key technologies are reaching the point where they can be deployed on the consumer market, said John LoPorto, president and chief executive of Power Tagging Technologies Inc., a Boulder company that is developing technology that would allow utilities to better track power production and consumption.

Plug-in vehicles soon will be able to travel from city to city and be charged anywhere. Utilities will be able to identify the vehicle and send the power bill to the proper owner.

“This will allow a plug-in vehicle to plug in anywhere,” LoPorto said. “Any outlet anywhere is a viable public-access charging point.”

But there are many issues that must be sorted out before smart grids can be deployed. They include devising price models, deploying billing systems, changing government regulations, standardizing technology and equipment and consumer education.

“We have to come up with ideas to fix all of those challenges before we see this dramatic expansion of the market,” said Craig Eicher, Boulder area manager for Xcel Energy Inc.

That work largely will be behind the scenes and, in some cases, will have little to do with technology itself. Regulations set by states governing how utilities operate will have to be updated, said David Eves, president and CEO of Public Service Company of Colorado, which is the Colorado division of Xcel Energy.

Regulations on who can sell energy to consumers are an example. Currently in Colorado, consumers can only buy power directly from a utility, Eves said. That regulation would have to change if third parties wanted to set up charging stations where electric vehicle owners could plug in at a price.

Power companies also have to figure out ways to set fees to encourage vehicle owners to charge up at night or other times when demand is low, Eves said. True real-time pricing is a goal but is not imminent, he said.

The transition to smart grids and renewable energy sources will be a challenge for utilities, which are historically slow to evolve. They largely have mastered the job of providing cheap electricity to consumers and businesses, and there has not been much incentive to change, said Karthik Krishna, senior project engineer at Colorado Springs Utilities and a member of the National Institute of Standards and Technology’s Smart Grid Interoperability Panel.

“For a century, this industry served the country well,” Krishna said. “The rewards for innovation are not much, and the penalty for failure is huge.”

There also is a shortage of scientists, technicians and executives able to design and run smart grids, said Julie Zinn Patti, director of operations at Spirae Inc., a Fort Collins-based consulting firm.

“We have encountered work force issues, trying to find the talent that we need to do smart grids,” Patti said. Her company is helping the industry create training programs for workers.

Consumers will not have a lot of patience as utilities or companies work out the kinks.

“The consumer doesn’t care about all those issues,” said Eric Ridenour, CEO of UQM Technologies Inc., a Longmont-based company that develops electric motors and power systems for vehicles. “They just want the system to work.”

For electric vehicles to be widely adopted, the user experience has to pleasant, the vehicles have to be reliable, and the switch to electrification needs to be smooth.

“In the beginning, you have to over pamper the consumer so they don’t get a bad taste,” Ridenour said.

But the industry might catch a break. The first wave of electric vehicle users will be early adopters willing to pay a bit more to be on the cutting edge of technology and help reduce carbon emissions.

Experience also has shown drivers figure out pretty quickly how to best use their vehicles to maximize performance, said Ben Holland, the outreach coordinator of the Rocky Mountain Institute. The nonprofit has offices in Boulder and Snowmass and focuses on promoting more efficient use of resources.

Early adopters also tend to be tech savvy enough that they understand how to charge vehicles in the cheapest and most efficient way, said Carl Lawrence, founder of Eetrex Inc., a Boulder-based electric and hybrid vehicle manufacturer.

But there’s a final danger the industries face, said Ryan Ferrero, CEO of Green Garage LLC, an eco-friendly repair shop in Boulder and Denver, and that’s paralysis by analysis.

Consumer demand for electric vehicles and smart grids exists, and people are getting tired of waiting. Other states are taking the lead with policies that strengthen the market while Colorado, which has the expertise to be a leader in the industry, is too focused on technical and policy issues.

“We have the talent, but we’re very slow. I don’t think we’re in a very progressive state. We’re tentative,” Ferrero said. “It’s a little bit maddening. Our strength is also our weakness.”

Consumers and the free market, not scientists and analysts, ultimately will determine what works in a situation Ferrero likened to the auto industry in the early 20th century.

Companies and utilities will have to accept the fact that systems they invest a lot of time and money in might be dead ends.

“Unfortunately, some of those technologies are not going to stand the test of time,” he said.

The roundtable was hosted by Holland & Hart LLP and Ehrhardt Keefe Steiner & Hottman PC at the offices of Holland & Hart.

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